Japan Offers GlobalFoundries $21B for U.S. Fab Expansion

Japan has offered up to $21 billion to GlobalFoundries to expand its existing U.S. semiconductor complex in an unprecedented public-private partnership between the two nations and the fifth-largest chip foundry by sales. Analysts voiced concerns that the company may be too dependent on government support.

Under the agreement, GlobalFoundries will build and run two new chip fabs at its existing Malta, New York, site under a U.S.-Japan trade and investment agreement led by the administration of U.S. President Donald Trump, who has pledged to return chipmaking to the U.S.

The initiative will accelerate U.S. chip production, strengthen critical supply chains, and support growing AI demand, the company said in an Oct. 14 press release. After the two fabs enter production, U.S. capacity will increase by about 10%, GlobalFoundries CEO Tim Breen said on a webcast.

The investment also reduces Japan’s geographic concentration risk, Breen said. GlobalFoundries hailed the new investment model, expecting to achieve profit per silicon wafer similar to current margins without incurring associated fixed costs in the tens of billions of dollars, the company said.

Japan is a major chipmaking nation, yet most of its production remains at home. The global chip industry, meanwhile, has evolved beyond borders.

“This is a bold new initiative for semiconductor manufacturing, bringing together the U.S. and Japan with GF’s differentiated technology and decades of manufacturing expertise to accelerate trusted capacity in New York,” Breen noted.

Existing GlobalFoundries customers, including Apple, Renesas, General Motors, and Cirrus Logic, gave their endorsement to the plan. GlobalFoundries has also been a trusted supplier of chips to the U.S. military.

“We are planning around GF’s new capacity in New York as an extension of Renesas’s own production footprint, trusted U.S.-based manufacturing backed by a strong U.S.-Japan partnership,” Renesas CEO Hidetoshi Shibata said in the release. “These capabilities are essential as we deliver advanced solutions, with demand for electrification, connectivity, AI, and data center applications accelerating worldwide.”

“We’ve partnered with GlobalFoundries to produce essential chips for Apple products right here in the U.S., as part of our $600 billion commitment to American investment,” said Sabih Khan, Apple’s COO, in the release.

“GM is making strategic investments in autonomy and centralized computing to power the next generation of software-defined vehicles and deliver customer-focused technologies at scale, including widespread deployment of AI across our vehicles and breakthrough capabilities,” GM president Mark Reuss said. “GM and GF established the first direct automaker-to-foundry supply agreement, and expanding domestically owned and operated fab capacity in upstate New York marks a decisive step forward for American manufacturing.”

The first fab, backed by a $10 billion investment, is scheduled to begin production in 2029. The first fab will add about 900,000 300-mm wafers to annual U.S. capacity when fully loaded. The second facility will reach the same target.

U.S. investment

Under the Trump administration, the U.S. government has pursued partnerships with the semiconductor industry.

The U.S. Department of Commerce (DoC) said it will take a 4% equity stake in GlobalFoundries, enabling the American public to share in GlobalFoundries’ growth. The U.S. government more than a year ago took a 10% equity stake in GlobalFoundries’ rival Intel. The U.S. recently awarded $1 billion in R&D funding to Anderon, IBM’s new quantum chip foundry, in New York.

GlobalFoundries has agreed with the DoC to change an existing CHIPS Act award to reallocate $955 million to the company to boost earlier investments in silicon photonics, silicon-germanium (SiGe), and advanced packaging at facilities in Malta and Burlington, Vermont.

Analysts expressed concern that the company may be relying too heavily on government support.

“The new investments from Japan along with the reallocation of funds to silicon photonics and related technologies will strengthen GF’s ability to serve customers that prefer U.S.-based manufacturing capacity,” BNP Paribas Equity Research senior analyst Karl Ackerman said in a report provided to EE Times. “The U.S. government’s decision to take this significant equity stake is a meaningful positive for GF, effectively positioning the company as a government-backed strategic supplier. However, we think today’s news also underscores the extent to which GF’s long-term growth prospects lean on government intervention rather than free-market competitiveness.”

GlobalFoundries-TSMC partnership

GlobalFoundries has been one of the first foundries to enter the silicon photonics business.

On Oct. 8, GlobalFoundries announced an agreement with TSMC for a U.S.-based supply of silicon interposers for TSMC’s CoWoS advanced packaging that has been a production bottleneck, according to analysts surveyed by EE Times. Under the agreement, GlobalFoundries will add capacity at its New York facility, supporting growing AI demand.

Production is slated for the first half of 2028. The agreement has an initial term of five years and provides for future expansion.

TSMC declined to comment, citing a quiet period leading up to the company’s quarterly earnings announcement today.

TSMC reported record sales and profit for the third quarter of 2026. The world’s top chip foundry said it has been investing carefully in capacity expansion, projected to be somewhere between $60 billion and $64 billion this year.

Even so, TSMC CEO C.C. Wei said on an earnings call with analysts today that the company has “no intention of leaving food on the table for others” in the foundry business. Wei added that the company has been evaluating Texas after expansion of its first “gigafab” in Phoenix, Arizona.

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Alan has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.