Japan to fund construction of new semiconductor plants in the United States
The United States and Japan have agreed on a new investment project to expand semiconductor production on American soil. The Japanese side will fund the construction of a GlobalFoundries facility in New York state at approximately $10 billion. In the future, total investment could grow to $21 billion.
The announcement was made by Japan's Ministry of Foreign Affairs and the U.S. company GlobalFoundries. The agreement was reached on October 14, and the Japanese government officially confirmed it the next day.
The project involves creating two new semiconductor fabrication plants in the town of Malta, New York state. GlobalFoundries was selected as the technology partner and operator for the future facilities, while financing will be provided by Japan.
Initial investment of about $10 billion will be directed to construction of the first plant. Work is planned to begin by the end of 2026, with production startup expected in 2029.
The facility will manufacture chips on 300-mm silicon wafers. At full capacity, it is expected to process about 900,000 wafers annually.
The second phase includes the possibility of attracting another approximately $10 billion for construction of an additional plant. Its production capacity may also be about 900,000 wafers per year. Thus, the total funding for the program, including associated costs, could reach $21 billion.
At the same time, expansion to a second facility remains a prospective step rather than a completed investment.
The new production capacity is primarily aimed at semiconductors used in automobiles, industrial equipment, smartphones, and data center infrastructure.
Japan's Ministry of Foreign Affairs emphasizes that this pertains to producing chips using mature process technologies. Such microchips are widely used in electronics and industry, although they are not the most advanced processors for artificial intelligence.
The project is expected to create about 27,000 jobs in construction and related sectors, as well as over a thousand permanent highly skilled positions directly in manufacturing.
Japanese equipment and materials manufacturers are planned to be brought into the cooperation. Tokyo Electron and SCREEN Holdings are interested in supplying production equipment, while TOKYO OHKA KOGYO is interested in materials and components. Japan's Renesas Electronics is considering purchasing chips from the new facilities.
Separately, GlobalFoundries has agreed with the U.S. Department of Commerce to repurpose $955 million within previously agreed support under the CHIPS and Science Act.
These funds will be directed to development of silicon photonics, silicon-germanium technologies, and advanced chip packaging at the company's facilities in New York and Vermont. This involves changing the designated use of already allocated funding, not a new subsidy.
In addition, the U.S. Department of Commerce, under a separate agreement, will receive a package of GlobalFoundries shares amounting to approximately 4%.
The new project will be implemented within a large-scale U.S.-Japan investment initiative launched in September 2025. It involves attracting up to $550 billion in Japanese investments into the American economy, particularly in energy, industry, and strategic technologies.
For Washington, expanding domestic semiconductor production is part of policy to reduce dependence on foreign suppliers. Tokyo, in turn, expects to gain additional opportunities for Japanese equipment manufacturers and ensure more stable chip supplies.
Based on materials from: Japan Ministry of Foreign Affairs, October 15, GlobalFoundries, October 14
