Japan will invest up to $21 billion in two semiconductor factories in New York state under a major expansion of U.S.-Japanese cooperation in advanced manufacturing.
The factories will be jointly owned by U.S. and Japanese interests and operated by GlobalFoundries.
Japan will provide the investment capital, while the U.S. government will hold a stake in the facilities. GlobalFoundries will receive fees for building and operating the factories and licensing its semiconductor-manufacturing technology.
The project forms part of Japan’s broader commitment to invest $550 billion in the United States under the trade agreement reached between Washington and Tokyo.
In a separate agreement, the U.S. government will acquire another 4% stake in GlobalFoundries, bringing its total ownership of the semiconductor manufacturer to approximately 7%.
Initial customers for the new factories are expected to include Japanese semiconductor company Renesas Electronics and Apple.
The investment underscores the growing role governments are playing in global semiconductor supply chains.
The United States, Japan and other major economies have committed billions of dollars to domestic chip manufacturing as policymakers attempt to reduce dependence on geographically concentrated production.
Japan has already announced more than $100 billion of projects under the broader U.S. investment framework.
The GlobalFoundries expansion could also benefit Japanese semiconductor-equipment manufacturers because some of Japan’s investment capital is expected to flow back toward companies supplying machinery for the new factories.
For markets, the project represents another major commitment of foreign capital to U.S. manufacturing while strengthening GlobalFoundries’ position in strategically important domestic semiconductor production.
The next issues to watch are the construction timetable, final customer allocations and how quickly the factories add meaningful semiconductor capacity in the United States.
