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GlobalFoundries to operate two new New York chip fabs backed by Japan

GlobalFoundries to operate two new New York chip fabs backed by Japan

Money Moves

Washington and Tokyo will co-own both plants through a holding company; the first is due online in 2029

October 14th, 2026: GlobalFoundries selected to operate two new fabs

Overview

Updated Oct 25

Japan will put up as much as $21 billion for two chip factories in Malta, New York, with GlobalFoundries as the operator. The first plant is due to start production in 2029 and would add about 900,000 wafers of annual capacity.

Washington and Tokyo will own the plants jointly through a special purpose vehicle, and GlobalFoundries puts in no capital; it earns fees for running them. Cash the plants generate splits evenly between the two governments until a set amount is reached, then 90% goes to the U.S. GlobalFoundries says the Malta site is permitted and shovel-ready, with groundbreaking planned for later in 2026.

Why it matters

If both fabs come online, the U.S. adds 1.8 million wafers of annual chip capacity, cutting reliance on Asian manufacturing.

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Key Indicators

7%
U.S. equity stake in GlobalFoundries
The Commerce Department adds roughly 4% to its existing 3% stake. Trump values it at more than $2 billion.
$10B
Confirmed first-phase funding
Japan's foreign ministry confirmed $10 billion for the first fab; the full $21 billion is conditional on a second-fab decision.

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People Involved

TB
Tim Breen
Chief Executive Officer, GlobalFoundries
Leading GF's expansion under the U.S.-Japan initiative
 Donald Trump
Donald Trump
President of the United States
Negotiated the trade agreement enabling the deal
MR
Michael Robbins
President and CEO, Semiconductor Industry Association
Applauded the deal
 Howard Lutnick
Howard Lutnick
U.S. Secretary of Commerce
Named by the New York Times as the architect of the Japan co-investment arrangement

Organizations Involved

GlobalFoundries
GlobalFoundries
Semiconductor manufacturer
Selected as technology provider and operator for two new fabs

One of the world's largest contract chipmakers, focused on differentiated semiconductor technologies.
U.S. Department of Commerce
U.S. Department of Commerce
Federal Agency
Will receive about 4% equity in GlobalFoundries; amended CHIPS award

The federal agency overseeing CHIPS Act implementation and the equity arrangement.
Semiconductor Industry Association (SEMI)
Semiconductor Industry Association (SEMI)
Trade association
Applauded the deal

The Semiconductor Industry Association (SIA), the U.S. chip industry's main trade group. SEMI is a separate organization for chip-equipment makers.

Timeline

2025 2031

6 events Latest: October 14th, 2026 · 4 weeks ago
Tap a bar to jump to that date

  1. Second fab production targeted for 2031

    Upcoming Milestone

    Reports place second-fab production in 2031, pending a go-no-go decision by the partners before end-2028.

  2. First fab expected to start production

    Upcoming Milestone

    First 300mm fab expected online, adding about 900,000 wafers annual capacity.

  3. Partners to decide on second fab

    Upcoming Decision

    Partners will decide whether to build second factory before end of 2028.

  4. GlobalFoundries selected to operate two new fabs

    Latest Announcement

    U.S.-Japan initiative funds up to $21 billion for two fabs at Malta, New York.

  5. Groundbreaking scheduled for fourth quarter

    Construction

    GlobalFoundries says the Malta site is permitted and shovel-ready, and that groundbreaking will come in the fourth quarter of 2026.

  6. U.S. and Japan strike trade and investment deal

    Agreement

    Japan agrees to invest $550 billion in the U.S. in return for lower tariffs on Japanese cars and imports.

Scenarios

1

First fab online in 2029, second approved

Likely Resolves by End of 2029

Discussed by: Reuters, GlobalFoundries executives

Construction begins this year at the Malta site. The partners decide on the second fab before end of 2028. If both proceed, the U.S. gains about 1.8 million wafers of annual capacity. GlobalFoundries earns management and technology fees for at least 20 years.

2

Second fab delayed or cancelled

Possible Resolves by End of 2028

Discussed by: Reuters, market analysts

The partners decide before end of 2028 whether to build the second fab. A downturn in chip demand or a shift in U.S.-Japan trade relations could delay or kill it. The first fab would still proceed, but total capacity would be roughly half the original plan.

3

Deal faces political or legal challenges

Possible Resolves by Jan 20, 2027

Discussed by: The Hill, political analysts

The U.S. government takes a 4% equity stake in GlobalFoundries, rising to 7%. A change in administration or a legal challenge to the equity arrangement could complicate the deal. The trade agreement that enabled it could also be renegotiated.

4

Third fab announced for Malta site

Unlikely Resolves by End of 2028

Discussed by: Albany Business Review

Local coverage said a third fab 'could be in the works' beyond the two announced. No details or timeline given; likely depends on demand and the success of the first two.

5

Funding stops at the first $10 billion

Possible Resolves by End of 2028

Discussed by: Japan's Ministry of Foreign Affairs, via Streamline

Japan confirmed $10 billion for phase one; the second $10 billion is conditional. If the conditions are not met, only the first fab is built and U.S. capacity gains are roughly halved.

6

Japanese tool makers book the money before the fabs make wafers

Possible Resolves by End of 2029

Discussed by: Reuters, Plutux Insights

Reuters reported that Japanese equipment makers such as Tokyo Electron stand to gain from the $21 billion, and Plutux Insights argued the cash reaches the tool chain before GlobalFoundries ships a wafer. On that reading, the fabs add U.S. capacity slowly while suppliers collect first.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

May 2020 - 2024

TSMC builds Arizona fabs (2020-2024)

Taiwan Semiconductor Manufacturing Company committed to build fabs in Arizona under CHIPS Act incentives. The first fab began production in 2024 after construction delays.

Then

TSMC's Arizona fabs became a centerpiece of U.S. chip onshoring efforts.

Now

Established a model for foreign chipmakers building U.S. capacity with government support.

Why this matters now

Shows the scale and timeline of building new U.S. chip fabs, and the government incentives driving them.

September 1986

U.S.-Japan Semiconductor Agreement (1986)

The U.S. and Japan signed the first major semiconductor trade deal, imposing minimum price floors on Japanese chips and setting a 20% foreign market share target for Japan.

Then

Japanese chipmakers agreed to price floors and market access commitments.

Now

Marked the start of decades of U.S.-Japan semiconductor trade management.

Why this matters now

Shows the long history of U.S.-Japan semiconductor cooperation and tension, now evolving into joint investment.

August 2022

CHIPS and Science Act (2022)

The U.S. passed the CHIPS and Science Act, providing billions in subsidies for domestic semiconductor manufacturing. GlobalFoundries received $1.63 billion in grants.

Then

Kicked off a wave of U.S. fab construction announcements.

Now

The new deal amends GF's CHIPS award, reallocating $955 million to silicon photonics and advanced packaging.

Why this matters now

The U.S.-Japan deal builds on and modifies the CHIPS Act framework.

Sources

(23)
+17
GlobalFoundries Reuters via Investing.com The Hill The Independent Semiconductor Industry Association Quartz EarningsCalls.dev Investor's Business Daily Associated Press via Joplin Globe Dealroom Construction Review Albany Business Review 日本経済新聞 Engineering News-Record Yahoo Finance Streamline Earnings Call API The Wall Street Journal The National JETRO The New York Times via Northwest Arkansas Democrat-Gazette Business Recorder Construction Dive