Japan to fund $21 bln of chip plants at GlobalFoundries in New York
Tokyo will finance two US semiconductor factories under a trade pact with Washington. Reuters says the deal carries low risk for Japan.
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what happened
According to Reuters, GlobalFoundries said on October 15 that it will run two new semiconductor manufacturing facilities at its New York site. Japan will initially put in roughly $10 billion for the first plant, with construction due to start by the end of 2026, and could add about $11 billion more later.
GlobalFoundries, owned by Abu Dhabi's sovereign fund Mubadala, will supply technology, operating and construction expertise, and collect fees and eventually a share of earnings. The project is part of a US-Japan pact under which Japan will invest $550 billion in the US in return for lower American import tariffs. The US Department of Commerce will also receive about a 4% equity stake in GlobalFoundries.
why it matters
For markets, the deal shows how a trade agreement is turning into concrete investment. Reuters notes that returns on making low-end commoditised chips will be modest, but a safe partner and stronger supply chains for Japanese automakers make the project less risky.
market impact
Japanese automakers: more secure chip supply; semiconductor sector: new US capacity ahead
tags
instruments
sources
- Japan's strong-armed $21 bln chip bet is low risk — Reuters, 22 October 2026 at 02:01 UTC
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