GlobalFoundries to Run Two Japan-Funded New York Fabs Under Up-to-$21 Billion Deal; Shares Rise Nearly 5%

Japan will invest up to $21 billion in two new chip factories at GFS GlobalFoundries' Malta, New York site, with GlobalFoundries selected to operate them, Reuters reported on October 14. The money comes from Japan's $550 billion US investment pledge, made in exchange for lower US tariffs on Japanese cars and other imports. Japan provides all of the investment capital, the plants will be jointly owned by the US government and Japanese interests, and GlobalFoundries will earn fees for building and running them plus licensing fees for its manufacturing technology.

According to the company's release, about $10 billion funds a first 300mm fab expected online in 2029, with roughly another $10 billion for a second. Each adds about 900,000 300mm wafers of annual US capacity. The Commerce Department also takes about a 4% equity stake in GlobalFoundries, bringing the US government's total ownership to about 7%, per Reuters. Renesas and Apple are among the initial customers, and GlobalFoundries is reallocating $955 million of its CHIPS Act award toward silicon photonics, silicon germanium and advanced packaging in Malta and Burlington, Vermont. CEO Tim Breen said GlobalFoundries was selected because "fabs of this scale require more than capital."

Shares rose nearly 5% in premarket trading, per Reuters, and were up 4.9% at $48.99 as of 10 a.m. ET, according to The National; the stock had already gained more than 33% this year. The announcement follows an October 8 agreement under which GlobalFoundries will supply silicon interposers for TSM TSMC's CoWoS advanced-packaging ecosystem from the same Malta fab, a roughly $2 billion contract with an initial five-year term and a volume ramp expected in the first half of 2028.

What to watch: groundbreaking on the first fab, which the company expects later in 2026; which process technologies the new fabs will run, which neither the company nor Reuters specified; and how fee and licensing income from plants GlobalFoundries operates but does not own shows up in its results.