UAE-backed GlobalFoundries and TSMC announce $2bn manufacturing agreement

The United Arab Emirates-backed semiconductor firm GlobalFoundries and Taiwan Semiconductor Manufacturing Company (TSMC) have agreed to a $2 billion manufacturing partnership aimed at strengthening US chip production. GlobalFoundries, headquartered in New York, will supply TSMC with silicon interposers, components that facilitate chip communication on logic boards.

The news sent GlobalFoundries' shares soaring by 2.8% to $49.44 per share. As artificial intelligence drives a surge in demand for semiconductors, advanced packaging is becoming crucial for delivering performance, power efficiency, and scale needed for next-generation AI systems. Ed Kaste, a senior vice president at GlobalFoundries, emphasized that their trusted US manufacturing footprint will provide a secure and scalable source of essential advanced-packaging elements to aid customers in accelerating innovation and strengthening the semiconductor supply chain.

Production of silicon interposers on a large scale is anticipated to commence in early 2028. The deal lays the groundwork for capacity expansion as customer demand increases. TSMC, one of the world's leading chip manufacturers, has been investing in the US to bolster production and research, with President Donald Trump reportedly announcing a $100 billion investment in the country last year.

Semiconductor manufacturing is gaining prominence as the US and China vie for dominance in the AI sector. During the announcement, Trump, alongside TSMC CEO CC Wei, stated that this move would ensure that the most powerful AI chips in the world are built in America, with a significant portion produced by TSMC. GlobalFoundries, which is partially owned by Abu Dhabi’s sovereign fund, Mubadala Investment Company, stands to benefit from this strategic alliance.