Japan to fund up to $21 billion for two GlobalFoundries fabs in New York as U.S. takes 4% stake

Japan will put up as much as $21 billion to build two chip plants at GlobalFoundries' campus in Malta, New York, with the New York-based chipmaker running them and the Commerce Department separately taking an equity stake of about 4% in the company, GlobalFoundries said Wednesday.

Japan pays, GlobalFoundries runs the plants

GlobalFoundries disclosed the arrangement in a press release it also filed with the Securities and Exchange Commission on Oct. 14. The company said it was selected as the technology provider and operator for two new fabs under a U.S.-Japan initiative providing up to $21 billion. Japan will provide the investment; GlobalFoundries contributes its process technology, manufacturing experience and day-to-day operations.

About $10 billion is earmarked for a first 300mm fab, which the company expects to come online in 2029. A second investment of about $10 billion "would" fund another plant, wording that stops short of a firm commitment. GlobalFoundries said each fab would add roughly 900,000 300mm wafers a year of U.S. capacity when fully running. It expects to break ground on the first plant later this year at a Malta site it describes as permitted and shovel-ready, and it put the job count at about 27,000 construction and ecosystem positions plus more than 1,000 manufacturing roles in New York's Capital Region.

The ownership is the unusual part. Reuters, citing the company, reported that the plants will be jointly owned by the U.S. government and Japanese interests, with GlobalFoundries operating them. Washington takes a stake in the factories while Japan supplies all of the capital, and GlobalFoundries earns fees for building and operating them and for licensing its chipmaking technology to them.

Washington's stake in the company grows

In a separate agreement, the Commerce Department will receive equity in GlobalFoundries of about 4%. Chief executive Tim Breen told Reuters that brings the government's total ownership of the chipmaker to about 7%. GlobalFoundries remains majority-owned by Mubadala Investment Co., Abu Dhabi's sovereign wealth fund.

Commerce's CHIPS Program Office also amended the company's existing CHIPS and Science Act award, reallocating up to $955 million toward silicon photonics, silicon-germanium and advanced packaging at Malta and at Burlington, Vermont. As part of the amendment, GlobalFoundries agreed to expand its capital investment at those two sites to $5 billion. The department said the total size of the award will not increase, and that the investment covers what it called the first U.S.-based source of silicon interposers for advanced packaging.

A test case for Japan's $550 billion pledge

The project comes out of the trade deal struck last year in which Japan agreed to invest $550 billion in the United States and Washington cut tariffs on Japanese cars and other imports from at least 25% to 15%. Under that arrangement President Donald Trump selects the projects Japan funds, and available free cash flow is split evenly between the two countries until a set allocation is reached, after which 90% goes to the United States. Japan has announced two batches of projects worth more than $100 billion combined so far.

Commerce Secretary Howard Lutnick said in the company's release: "This is how the President's trade agreements result in transformational American industrial assets that strengthen our national and economic security." Breen said at least some of Japan's money will flow back to Japanese equipment makers such as Tokyo Electron, whose chief executive is also quoted in the release.

Customers are already named

Breen said GlobalFoundries will manage customer relationships and that Renesas Electronics and Apple are among the first customers for the New York plants. "We definitely would like to give priority to US and Japanese customers," he said. Renesas chief executive Hidetoshi Shibata said his company is "planning around GF's new capacity in New York as an extension of Renesas' own production footprint." Apple, General Motors and Cirrus Logic also gave supporting statements in the release.

What GlobalFoundries gets out of it

GlobalFoundries shares rose more than 4% in early trading, and The National put the stock up 4.9% at $48.99 around 10 a.m. ET.

For a contract chipmaker, the structure matters as much as the headline figure. GlobalFoundries gets a large block of new capacity and a fee stream without paying for the construction itself, while Japan supplies the capital and ownership sits with Washington and Japanese interests. The catch is time: the first fab is not due until 2029, and the second remains conditional.