Japan to Bankroll Two GlobalFoundries Fabs in New York With Up to 1 Billion

Japan to Bankroll Two GlobalFoundries Fabs in New York With Up to $21 Billion

Tokyo's money, GlobalFoundries' technology

GlobalFoundries said on Oct. 14 that it has been selected as the technology provider and operator of two new semiconductor fabs at its Malta, New York campus, under a U.S.-Japan initiative offering up to $21 billion in funding. Japan supplies all of the investment capital, while the plants are jointly owned by the U.S. government and Japanese interests and run by the chipmaker. Both are planned next to GlobalFoundries' existing Fab 8 site in the town of Malta, north of Albany.

The first fab targets output in 2029

About $10 billion is earmarked for the first facility, a 300mm fab expected to come online in 2029, with roughly another $10 billion contemplated for a second plant of similar size. Once fully operational, each fab is expected to add about 900,000 300mm wafers of annual U.S. capacity, up to 1.8 million between them. The company expects to break ground on the first one later this year, have it ready for equipment in 2028 and produce first wafers in 2029. The site is permitted and shovel-ready, using existing Malta infrastructure to speed construction.

Washington takes a 4% stake

President Donald Trump announced the deal on social media, writing, "Under my direction, JAPAN WILL PROVIDE THE CAPITAL for the 21 Billion Dollar Investment," and crediting the Commerce Department and Secretary Howard Lutnick. In a separate agreement, the U.S. government will take roughly a 4% equity stake in GlobalFoundries, lifting its total ownership to about 7% from 3%. The Commerce Department will also reallocate $955 million of GlobalFoundries' existing CHIPS and Science Act award toward silicon photonics, silicon-germanium and advanced packaging at Malta and at Burlington, Vermont. Trump's announcement put total federal investment in the company at $1.63 billion and the government's stake at more than $2 billion in value.

The taproot is last year's $550 billion pact

The chip money is an outgrowth of the U.S.-Japan trade agreement struck last year, under which Japan committed to invest $550 billion in strategic American industries — energy, semiconductor manufacturing and critical minerals among them — in return for the U.S. cutting tariffs on Japanese cars and other imports from at least 25% to 15%. Reuters reported that under the arrangement, Trump selects the projects that Japanese money funds. U.S. free cash flows from the investments are split evenly between the two countries until a set allocation is reached, after which 90% goes to the United States.

Fees instead of capex for the operator

According to the structure outlined by the company, the fabs sit inside a government-owned special-purpose vehicle that carries project development, construction, ramp operations and technology and management fees. GlobalFoundries collects technology fees, construction-management fees, operating-management fees and reimbursements for shared services and infrastructure, plus a share of the vehicle's future EBITDA. Technology fees are expected to begin in 2027 and run for at least 20 years.

Apple and Renesas lead the customer list

GlobalFoundries CEO Tim Breen told Reuters that initial customers for the New York factories include Japan's Renesas Electronics and Apple. Apple Chief Operating Officer Sabih Khan said the company already partners with GlobalFoundries "to produce essential chips for Apple products right here in the United States," part of Apple's $600 billion U.S. investment commitment. Cirrus Logic and General Motors were also named as customers planning to use the added capacity, while Tokyo Electron appeared as a supplier partner. Breen said the company wants to give priority to U.S. and Japanese customers.

27,000 construction jobs in the Capital Region

GlobalFoundries says the project is expected to create about 27,000 construction and ecosystem jobs and more than 1,000 high-skilled manufacturing positions in New York's Capital Region. Governor Kathy Hochul called the Malta expansion "a tremendous vote of confidence in New York's world-class workforce, innovation ecosystem," pointing to the state's Green CHIPS program as continuing support for the region's semiconductor cluster.

Shares rise, but dilution and a cap remain

GlobalFoundries shares rose about 5% in premarket trading and held gains through the session as investors read the arrangement as strategic backing. Two caveats sit alongside the enthusiasm: the government's additional 4% stake means dilution for existing holders, and once the cash-flow split crosses its threshold, 90% of the money flows to the U.S. side rather than to the Japanese investors or the project vehicle. GlobalFoundries is majority-owned by Abu Dhabi sovereign fund Mubadala Investment Co., a shareholding that may draw further scrutiny as the deal moves through approvals.

Second fab decision due by end-2028

The milestones to watch: groundbreaking on the first fab this quarter, equipment move-in in 2028 and first wafers in 2029, with the partners deciding before the end of 2028 whether to build the second. How quickly Japanese capital is deployed — and how much of it lands as orders for toolmakers such as Tokyo Electron — will determine how much of the $21 billion recirculates to Japan. Whether the second fab is ultimately built still depends on customer demand and on how smoothly this first-of-its-kind U.S.-Japan build-and-own model actually runs.