GlobalFoundries will operate two new chip factories in New York state funded by Japan with up to $21 billion. The company's shares rose about 5% in premarket trading on Wednesday. The US government will also take a 4% stake in the chipmaker.
GlobalFoundries shares rose about 5% in premarket trading on Wednesday after the company said it will run two semiconductor factories in Malta, New York, under a US-Japan initiative. Japan will invest up to $21 billion in the plants, which will be jointly owned by the US government and Japanese interests.
How the deal is built
Japan will provide all of the investment capital, while GlobalFoundries contributes technology and operations. An initial investment of approximately $10 billion will fund a new 300mm fab expected to come online in 2029, with another approximately $10 billion funding a second fab.
The company, which is majority-owned by Abu Dhabi's sovereign wealth fund Mubadala Investment Co, will earn fees from building and operating the factories and from licensing chip manufacturing technology to them. The deal is part of a $550 billion Japanese investment pledge struck last year by President Donald Trump's administration, in return for lower US tariffs on Japanese cars and other imports.
Jobs, capacity and a government stake
The first fab is expected to add approximately 900,000 300mm wafers of annual capacity when fully operational, with the second adding a similar amount. The project is expected to create about 27,000 construction and ecosystem jobs and more than 1,000 manufacturing jobs in New York's Capital Region.
Separately, the US government will take a 4% stake in GlobalFoundries, bringing its total ownership to about 7%, CEO Tim Breen told Reuters. GlobalFoundries also agreed with the US Department of Commerce to reallocate $955 million of its existing CHIPS and Science Act award toward silicon photonics, silicon-germanium and advanced packaging.
Customers come first
Initial customers for the New York factories include Japan's Renesas Electronics and Apple, according to Breen. He told Reuters: "We definitely would like to give priority to US and Japanese customers," while expecting other companies to join the demand later.
Sources: Investing.com, Investing.com (Reuters)
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