Japan plans to invest up to $21 billion in two semiconductor factories in Malta, New York. GlobalFoundries will operate the facilities, which will be jointly owned by the U.S. government and Japanese interests.
The project is part of a broader U.S.-Japan investment agreement. Last year, Japan pledged $550 billion for investment in the United States.
In return, the Trump administration lowered tariffs on Japanese cars and other imports from at least 25% to 15%.
For GlobalFoundries, the plan could expand production at its existing New York site. The first factory is scheduled to begin construction this year.
Chip production is expected to start in 2029. Meanwhile, the partners will decide by the end of 2028 whether to build a second factory.
What the factories could produce
When fully operational, the first facility is expected to add capacity for about 900,000 300-millimeter wafers each year.
A wafer is a thin slice of semiconductor material. Manufacturers use it to produce many individual chips.
That capacity would place the factory among the larger semiconductor facilities in the United States.
GlobalFoundries expects the first plant to create more than 1,000 factory jobs in New York. The company says initial customers include Japan’s Renesas Electronics and Apple.
The factories will support efforts to expand U.S. chip production. Semiconductors power products ranging from phones and cars to communications equipment.
However, chip manufacturing requires specialized facilities, equipment and skilled workers.
Building new capacity can take years, so the 2029 production target reflects a long investment timeline.
Ownership, funding and government support
Japan will provide all the investment capital under the deal. The U.S. government’s ownership stake in GlobalFoundries will rise from 3% to 7%, CEO Tim Breen told Reuters.
The company had previously received $1.63 billion in U.S. grants.
President Donald Trump said the government values its 7% stake at more than $2 billion.
He described the arrangement as a way to turn grants into a financial return for the United States.
GlobalFoundries will also redirect $955 million in previously awarded U.S. funding.
The company plans to use that money to accelerate work on silicon photonics, silicon-germanium chips and advanced packaging at existing sites in New York and Vermont.
These technologies help connect chips and move data, which can support faster communications and computing.
In addition, GlobalFoundries expects the agreement to generate management fees for at least 20 years.
It forecasts $50 million in fees next year as it oversees construction of the first factory.
Some of Japan’s investment may also reach Japanese equipment suppliers, including Tokyo Electron.
A strategic investment with financial tests
The deal highlights how governments are using investment and trade agreements to shape semiconductor supply chains.
For Japan, funding U.S. factories could deepen industrial ties and create opportunities for Japanese suppliers.
For the United States, the project could add domestic manufacturing capacity and strengthen access to chips.
Still, Japan’s Trade Minister Ryosei Akazawa said the projects must pass reviews for financial viability, repayment and benefits to Japanese companies.
The investment is part of Japan’s larger U.S. commitment, which has already produced more than $100 billion in announced projects.
The first factory remains years from production, and the second has not yet received a final go-ahead.
Therefore, the project’s impact will depend on construction progress, customer demand and the partners’ decision before 2028.
