October 15, 2026 / SemiMedia / — GlobalFoundries plans to build two chip factories in New York with up to $21 billion in Japanese government support. The facilities will be jointly owned by the United States and Japan and operated by GlobalFoundries, with funding drawn from Japan’s $550 billion U.S. investment commitment. The U.S. government will also receive an approximately 4% stake in the company under the broader agreement.

The factories will produce foundational semiconductors used in vehicles, industrial equipment and communications systems. The project aims to expand U.S. production of critical chips and reduce reliance on East Asian suppliers. Growing AI infrastructure investment is also increasing demand for supporting components, including power management and signal processing chips.

Construction of the first fab has begun in Malta, New York, with operations expected to start in 2029. GlobalFoundries plans to begin the second facility as soon as possible after the first is completed, although its timing will depend on demand. CEO Tim Breen said the agreement would help the company add capacity to meet customer needs.

Separately, the U.S. Commerce Department will reallocate $955 million in CHIPS Act incentives toward GlobalFoundries’ factory expansion and modernization projects. The company will commit $5 billion in capital investment to its New York and Vermont facilities, with work also covering silicon photonics, chip packaging and silicon-germanium technologies.

GlobalFoundries expects the U.S.-Japan agreement to generate approximately $3 billion in adjusted free cash flow over the next decade and add $0.50 to $0.75 to annual earnings per share.