UAE-backed GlobalFoundries to run two chip plants under $21bn US-Japan deal

Japan plans to invest up to $21 billion in two new chip-production facilities in New York state, to be jointly operated by GlobalFoundries and the US government, the semiconductor firm announced on Wednesday. The Commerce Department will acquire a 4% equity stake in GlobalFoundries, increasing the US government's stake to 7%, according to GlobalFoundries CEO Tim Breen, who spoke to Reuters.

GlobalFoundries is primarily owned by Abu Dhabi’s Mubadala Investment Company. This move is part of a deal from last year, which lowered US tariffs on Japanese imports from 25% to 15%, while Japan will invest a further $550 billion in the US economy. Breen explained that this collaboration combines US and Japanese expertise to accelerate semiconductor manufacturing capacity in New York.

GlobalFoundries will contribute its technological and manufacturing expertise, while Japan will provide the capital. The deal includes an initial $10 billion investment for constructing a new 300mm semiconductor manufacturing plant, expected to be operational by 2029, with a further $10 billion allocated for a second factory. The first plant will add around 900,000 300mm wafers to annual US manufacturing capacity upon completion, with the second factory contributing an equal amount.

Additionally, GlobalFoundries intends to amend its existing award under the US Chips Act to reallocate $955 million and fast-track investments in silicon photonics, silicon-germanium, and advanced packaging at its US sites in New York and Vermont. This announcement follows shortly after GlobalFoundries signed a $2 billion manufacturing agreement with Taiwan Semiconductor Manufacturing Company (TSMC).