The United States and Japan have unveiled a financing arrangement of up to $21 billion to support the construction of two semiconductor manufacturing plants in New York.
This is as the administration of President Donald Trump intensifies efforts to strengthen domestic chip production and secure critical technology supply chains.
Under the agreement, GlobalFoundries, a US-based semiconductor manufacturer, will operate the two facilities at its existing site in Malta, New York, a project with expectation of expanding American manufacturing capacity, create thousands of jobs and reduce reliance on overseas semiconductor production.
The initiative forms part of a broader US-Japan trade and investment agreement under which Japan has committed to investing up to $550 billion in American industries at Trump’s discretion in exchange for a reduced US tariff rate of 15 per cent on Japanese imports.
According to the investment plan, an initial commitment of approximately $10 billion will accelerate construction of the first fabrication plant, which is expected to begin operations in 2029. A further investment of about $10 billion is planned for the second facility, with the overall funding potentially reaching $21 billion.
The announcement also highlights a significant shift in Washington’s industrial policy, with the Trump administration seeking direct financial returns and equity ownership from investments designed to strengthen strategic industries.
US Commerce Secretary Howard Lutnick said at a ceremony in Malta that the American government would receive a 50 per cent share of the investment’s cash-flow profits, alongside an equity stake in GlobalFoundries.
Lutnick said the company had agreed to give the US government a seven per cent stake, which he valued at approximately $2 billion based on the company’s prevailing market valuation. However, a separate account of the agreement put the Commerce Department’s expected equity holding at approximately four per cent, leaving the precise shareholding arrangement unclear.
The development follows the Trump administration’s earlier move to secure a government ownership stake in Intel, signalling its willingness to use public investment to obtain equity and potential financial returns from strategically important private companies.
GlobalFoundries previously received federal support under the CHIPS and Science Act, introduced during the administration of former President Joe Biden to expand semiconductor manufacturing in the United States. The company said the Japanese investment would allow previously allocated federal funding to be redirected towards other areas of semiconductor development.
As part of the revised arrangement, GlobalFoundries and the US Department of Commerce have agreed to reallocate $955 million from the company’s existing federal award to support investments in silicon photonics, silicon-germanium technology and advanced packaging.
The investments will cover facilities in Malta, New York, and Burlington, Vermont, with the aim of expanding domestic production of technologies essential to communications infrastructure and data centres.
When fully operational, the first new plant is expected to add approximately 900,000 300-millimetre wafers to annual US manufacturing capacity. The second facility is projected to provide a comparable output, potentially delivering a substantial increase in domestic semiconductor production.
The project is also expected to generate about 27,000 construction and related ecosystem jobs, alongside more than 1,000 high-skilled manufacturing positions in New York’s Capital Region.
GlobalFoundries Chief Executive Officer, Tim Breen, said the partnership would combine Japanese investment, American industrial priorities and the company’s manufacturing expertise to accelerate the development of trusted semiconductor capacity.
The project comes amid intensifying global competition for semiconductor production, driven by the rapid expansion of artificial intelligence, data centres, electric vehicles and other technologies requiring advanced computing capabilities.
Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, has also been expanding its US manufacturing footprint, announcing an additional $100 billion investment in American operations earlier in 2025.
For Washington and Tokyo, the GlobalFoundries initiative represents both an industrial investment and a strategic effort to build a more resilient semiconductor supply chain, while giving the US government a direct financial interest in the expansion of a critical domestic manufacturer.
