Japan plans up to $21 billion for two New York chip plants run by GlobalFoundries

GlobalFoundries said on Wednesday, October 14, that Japan plans to invest up to $21 billion in two chip plants in New York state that the company would operate. The proposal could substantially expand US manufacturing capacity, with the first factory expected to come online in 2029, according to The National. The investment is part of a wider US-Japan arrangement, and the factories remain planned projects.

Reuters reported that Japanese interests and the US government would jointly own the factories, while Japan would provide all the investment capital. GlobalFoundries would earn fees for building and operating the plants and for licensing manufacturing technology. That distinction matters because the proposed factory ownership is separate from ownership of GlobalFoundries itself, which is majority-owned by Abu Dhabi's Mubadala Investment Company.

How the New York factories would be built

The National described an initial investment of about $10 billion for a new factory designed to make chips on 300mm wafers, followed by another $10 billion for a second factory. GlobalFoundries said the first plant would add about 900,000 300mm wafers to annual US manufacturing capacity once fully operational. It said the second would add roughly the same amount. The reported 2029 start applies to the first factory; the available reports do not give a complete timetable for the second.

GlobalFoundries chief executive Tim Breen told Reuters that Renesas Electronics of Japan and Apple are among the initial customers for the New York plants. He said GlobalFoundries would manage customer relationships and wanted to prioritize US and Japanese customers, while expecting that other companies could contribute to demand. Those statements describe the company's customer plans; the reports do not establish finalized allocations or production volumes for either named customer.

Separate US stake and existing chip funding

The US government would take a separate 4% stake in GlobalFoundries, Breen told Reuters, bringing its total ownership of the company to about 7%. That equity position is distinct from the proposed joint ownership of the two factories described by Reuters. The reported arrangement would therefore give the government a larger holding in the operator as well as an interest in the planned manufacturing sites.

GlobalFoundries has also agreed with the US Commerce Department to amend its existing CHIPS Act award, according to The National. The change would reallocate $955 million to accelerate investment in silicon photonics, silicon-germanium and advanced packaging at company sites in New York and Vermont. That funding concerns specified technologies and facilities within an existing award; it is a separate element of the company's US investment plans from Japan's proposed capital for the two factories.

Where the proposal fits in the US-Japan arrangement

The two reports place the announcement within a broader arrangement under which Japan is to invest $550 billion in the United States. The National said that arrangement accompanied a reduction in US tariffs on Japanese imports from 25% to 15%. Reuters reported that Japan had already announced two batches of projects worth more than $100 billion combined under the investment scheme. The New York proposal adds a large semiconductor manufacturing project to that sequence of announced investments.

Investors responded to the announcement: The National recorded GlobalFoundries shares up 4.9% at $48.99 as of 10 a.m. Eastern time, while Reuters reported a rise of more than 4% in early trading and a gain of more than 33% for the year to date. Those figures capture the market response at the times reported. The more consequential milestones for the factories are the planned buildout, the first plant's expected 2029 start and the eventual capacity the company says both sites could provide.