Updated: Japan to Invest $21 Billion to Build Up to Two GlobalFoundries Chip Factories in New York

The full text has been updated with Trump’s statement, stock prices, and transaction details

Stephen Nellis/David Shepardson/Makiko Yamazaki

Reuters New York/Washington, October 14 - Japan will invest about $21 billion to build up to two chip factories in New York State, jointly owned by the U.S. government and Japanese investors and operated by GlobalFoundries (GFS.O), the company announced on Wednesday.

This plan is part of an agreement reached last year by the Trump (link) administration, under which Japan will invest $550 billion in the U.S. in exchange for the U.S. reducing (link) tariffs on Japanese cars and other imports from at least 25% to 15%.

GlobalFoundries, headquartered in Malta, New York, is majority-owned by Abu Dhabi sovereign wealth fund Mubadala Investment Co. Its shares rose more than 4% in afternoon trading. So far this year, the company's stock has gained over 39%.

The first plant is scheduled to break ground this year and is expected to start production in 2029. GlobalFoundries executives stated that partners will decide whether to build a second factory by the end of 2028.

Once fully operational, the first plant is expected to add about 900,000 300mm wafers of annual capacity to the U.S., making it a major semiconductor manufacturing base in the country and creating more than 1,000 factory jobs in New York.

Previously, the U.S. government held a 3% stake in GlobalFoundries. CEO Tim Breen told Reuters that this ratio will rise to 7%. Under the agreement, Japan will provide all the investment capital.

U.S. President Donald Trump said on “Truth Social” that the U.S. government had provided the company with $1.63 billion in grants and now values the 7% stake at more than $2 billion.

“We are the first administration in history to turn appropriations into American returns,” Trump said.

Breen told Reuters that the initial customers of the New York plant will include Japan’s Renesas Electronics (6723.T) and iPhone manufacturer Apple (AAPL.O).

In a conference call with investors, executives stated that the new agreement will bring management fee income to the company for at least the next 20 years. This revenue is expected to reach $50 million next year, when the company will receive management fees for overseeing construction of the first plant.

GlobalFoundries will use the previously allocated $955 million from the U.S. government to accelerate investments in silicon photonics, silicon-germanium chip materials, and advanced packaging for its existing chip plants in Malta, New York, and Burlington, Vermont.

Breen of GlobalFoundries stated that at least part of the capital contributed by Japan will flow back to chip manufacturing equipment suppliers, such as Tokyo Electron 8035.T and other Japanese companies that co-lead the supply chain with American competitors.

“Obviously, we very much hope Japan’s equipment suppliers can take part,” Breen said. “We will remain open, but will definitely work closely with the Japanese industrial ecosystem because they have outstanding technology.”

So far, Japan has announced two batches of projects under the overall investment plan totaling more than $100 billion.

According to the agreement with the U.S., Trump will select projects funded by Japan. The available free cash flow from these investments will be split equally between the two countries (link) until a specific allocation plan is reached, after which 90% will go to the U.S.

(For the convenience of non-English speakers, Reuters has automated the translation of its reports into several languages. As automated translation may contain errors or lack the relevant context, Reuters does not guarantee the accuracy of automated translation text and provides it only for reader convenience. Reuters accepts no responsibility for any harm or loss caused by the use of the automated translation function.)