Japan is set to invest up to $21 billion in two chip-production plants in New York state that will be operated jointly by GlobalFoundries and the US government, the semiconductor manufacturer said on Wednesday.
In a separate agreement, the Commerce Department will take a 4 per cent equity stake in the company, bringing the US government's stake to 7 per cent, chief executive Tim Breen told Reuters. The company is majority owned by Abu Dhabi’s Mubadala Investment Company.
The move is part of a deal struck last year, under which US tariffs on Japanese imports were lowered from 25 per cent to 15 per cent while Japan will invest $550 billion in the US economy.
“This is a bold new initiative for semiconductor manufacturing, bringing together the United States and Japan with GF’s differentiated technology and decades of manufacturing expertise to accelerate trusted capacity in New York,” Mr Breen said.
Shares in GlobalFoundries were trading 4.9 per cent higher at $48.99 each as of 10am ET.
Under the agreement, Japan will provide all the capital while GlobalFoundries will input its technological and manufacturing expertise, and operational capacities.
The company makes integrated circuits on silicon wafers designed to help support AI and high-performance computing, communications infrastructure, and applications for aerospace and defence.
The deal comes with an initial investment of about $10 billion to boost the construction of a new 300mm semiconductor manufacturing plant – or “fab” – expected to come online in 2029, with an additional $10 billion to fund a second fab.
The company said the first fab will add about 900,000 of the 300mm wafers to annual US manufacturing capacity when fully operational, with a second factory adding about the same.
GlobalFoundries also agreed with the Commerce Department to amend its existing award under the Chips Act to reallocate $955 million and accelerate investments in silicon photonics, silicon-germanium and advanced packaging at its sites in the US states of New York and Vermont.
The announcement comes about a week after GlobalFoundries announced a $2 billion manufacturing agreement with TSMC.
