Japan will invest up to $21 billion to fund two new semiconductor manufacturing facilities in New York state, operated by GlobalFoundries (GFS) and jointly owned by the US government and Japanese interests. The move marks a major strategic expansion under last year’s $550B bilateral US-Japan investment agreement.
📌 Key Numbers & Deal Structure:
• $21 Billion Capital Commitment: Funded 100% by Japan, while the US government acquires equity ownership in the new factories.
• 7% US Ownership in GlobalFoundries: The US government takes a 4% direct stake in GlobalFoundries, bringing its total ownership in the chipmaker to ~7%.
• $550 Billion Investment Framework: Part of Japan’s broader commitment to invest in the US in exchange for lower tariffs on Japanese auto imports (reduced from 25%+ to 15%).
• Revenue & Profit Sharing: Available free cash flow will be split 50/50 until set thresholds are reached, after which 90% of profits flow to the US.
• Major Initial Anchor Clients: Japan’s Renesas Electronics and iPhone maker Apple are slated as primary priority customers.
💡 Supply Chain Impact: A significant portion of Japan’s $21B investment capital will flow back to Japanese chip-equipment suppliers like Tokyo Electron, cementing deeper integration across US-Japan semiconductor supply chains.