Kelly Cloonan
GlobalFoundries plans to build two chip plants in New York using up to $20 billion in funding from Japan and money from the CHIPS Act as the U.S. Commerce Department plans to take a 4% stake in the company.
The chip manufacturer said Wednesday that Japan would provide about $10 billion as an investment for each fab, which it said was enabled by President Trump's trade-and-investment agreement with the country. As part of a trade deal reached last year, Japan agreed to invest $550 billion in projects across strategic U.S. industries, including energy, semiconductor manufacturing and shipbuilding.
GlobalFoundries' shares gained 4.8% to $48.93, and are now up 41% year to date.
The company said the fabs aim to grow U.S. manufacturing capacity and meet rising demand across the automotive, industrial and connected infrastructure markets. Each fab is expected to add about 900,000 300-millimeter wafers annually when fully operational, and the first fab is expected to come online in 2029.
Under the plans, Japan would make an initial investment of about $10 billion for the first fab, which GlobalFoundries expects to break ground on later this year. An additional investment of about $10 billion would fund a second fab. Both facilities would be at GlobalFoundries' site in Malta, N.Y., where the company is headquartered.
GlobalFoundries and the Commerce Department have also agreed to amend the company's existing award under the CHIPS Act to reallocate $955 million to boost its investments in silicon photonics, silicon-germanium and advanced packaging at its facilities in Malta, N.Y., and Burlington, Vt.
GlobalFoundries also said that, under a separate agreement, the Commerce Department would receive about a 4% equity stake in the company. The government already had a roughly 1% stake in the company as part of a funding agreement earlier this year under the CHIPS Act.
Comments