Japan to Fund Up to $21 Billion for Two GlobalFoundries Chip Plants in New York as U.S. Stake Rises to 7%

Japan will put up to $21 billion into two new semiconductor plants at GlobalFoundries' campus in Malta, New York, the company announced today, Oct. 14. The U.S. government will take a 4% equity stake in the chipmaker as part of the package.

President Trump publicly announced the deal Wednesday on Truth Social, calling it "TRANSFORMATIONAL AND GENERATIONAL DEALS FOR AMERICA."

How the deal is structured

Japan provides all of the money. GlobalFoundries (Nasdaq: GFS) supplies the technology and operates the fabs. The plants will be jointly owned by the U.S. government and Japanese interests, the company said.

About $10 billion goes first to accelerate construction of a 300mm fab that GlobalFoundries expects to come online in 2029. Construction is scheduled to start later this year. A second $10 billion would fund another fab, but that one is not locked in. Company executives said the partners will decide on it before the end of 2028.

The first fab is expected to add roughly 900,000 300mm wafers of annual U.S. capacity. A second would add about the same. GlobalFoundries projects about 27,000 construction and ecosystem jobs and more than 1,000 permanent manufacturing jobs in New York's Capital Region.

The money traces back to the trade agreement Trump signed with Japan in July 2025. Japan pledged $550 billion in U.S. investment, and Washington cut tariffs on Japanese cars and other imports from at least 25% to 15%. Under that framework, returns are split equally between Washington and Tokyo up to a set ceiling, after which the U.S. share rises to 90%, Reuters reported.

The government's stake

The U.S. already held about 3% of GlobalFoundries. CEO Tim Breen told Reuters the new 4% Commerce Department stake brings that to 7%.

Trump said the government provided $1.63 billion in grants to the company and values its 7% stake at more than $2 billion. "We are the first administration ever to turn grants into money for America," he said. The $2 billion figure is the president's valuation.

The $955 million is not new federal spending. GlobalFoundries agreed with Commerce to amend its existing CHIPS and Science Act award and redirect that amount into silicon photonics, silicon-germanium chip material and advanced packaging at its Malta plant and its Burlington, Vermont, plant.

Commerce Secretary Howard Lutnick said the deal shows how "the President's trade agreements result in transformational American industrial assets that strengthen our national and economic security."

This is not a one-off. The Trump administration has repeatedly used CHIPS Act money to take minority stakes in chip and critical-minerals companies. GlobalFoundries is the latest.

Customers, fees and the money trail

Breen told Reuters the initial customers for the New York fabs include Japan's Renesas Electronics and Apple. On an investor call, executives said the arrangement will generate fees for GlobalFoundries for at least 20 years. They expect about $50 million of that revenue next year for managing construction of the first plant.

Part of Japan's capital is likely to circle back to Japan. Breen said some of it will flow to toolmakers such as Tokyo Electron. "Obviously, we have a strong interest in the Japanese equipment suppliers to be part of it," he said.

Ownership of GlobalFoundries itself also matters. The company is majority-owned by Mubadala Investment Co, Abu Dhabi's sovereign wealth fund. So a Japanese-funded, jointly government-owned project will be run by a company controlled by a Gulf state, with Washington now holding 7% alongside it.

Market reaction

GlobalFoundries shares were up 4.9% at $48.99 as of 10 a.m. ET. They were still up more than 4% in afternoon trading. The stock is up more than 39% this year. It had spiked as much as 15% ahead of the open before giving back much of that gain.

The deal lands about a week after GlobalFoundries announced a $2 billion manufacturing agreement with TSMC.

What is still open

The stated goal is to cut reliance on East Asian chip suppliers and add "trusted capacity" at home. The fabs target foundational chips used in cars, industrial equipment and communications networks, not leading-edge AI processors.

The 2029 online date for the first plant is a target, not a delivered result. The second fab is only an option for now. The ownership split between Washington and Tokyo and the terms of the returns remain to be spelled out. Trump's jobs and valuation figures are projections and estimates until the plants are built.

The next concrete marker is groundbreaking on the first fab, which GlobalFoundries says will come before the end of 2026.