Shares of GlobalFoundries (Nasdaq: GFS) rose approximately 4.5% in Wednesday trading after the chipmaker said Japan could provide up to $21 billion to finance two semiconductor factories in Malta, New York, under a U.S.-Japan chip manufacturing agreement. The Nasdaq-listed company will operate the plants under the agreement. In a separate arrangement, the U.S. Commerce Department will receive equity equal to roughly 4% of GlobalFoundries.

Japan to Fund Two New York Plants

Under the funding structure, Japan will provide the capital while GlobalFoundries — a foundry that manufactures chips to other companies' designs rather than selling its own branded chips — supplies the technology and manages production. The first plant is expected to receive about $10 billion and begin operating in 2029, with construction at the Malta site planned to begin later this year. Another $10 billion could fund a second factory, although that funding remains unconfirmed, meaning the project's ultimate size hinges on a decision still pending. The $21 billion figure represents a ceiling rather than money already received. For comparison, GlobalFoundries reported $6.791 billion in revenue for 2025 — less than a third of the project's funding ceiling, a measure of how much the planned expansion relies on state-backed financing.

Planned Capacity of 1.8 Million Wafers

The first factory is expected to add capacity for 900,000 wafers annually once fully operational. A second plant would add the same amount, bringing the combined potential to 1.8 million 300mm wafers — the large silicon discs that form the base for chips, and the industry's standard format for high-volume production. The schedule itself — construction starting later this year against a 2029 operating target — reflects the multi-year lead times that separate groundbreaking from output at semiconductor plants. GlobalFoundries expects the project to support about 27,000 construction and related jobs during the building phase, as well as more than 1,000 manufacturing roles.

Hidetoshi Shibata, chief executive of Japanese chipmaker Renesas, said his company plans to use the New York capacity as an extension of its production network — the kind of arrangement the foundry model is built around, in which chip designers contract out manufacturing while keeping their own products. GlobalFoundries says the new plants will serve automotive, industrial and connected technology customers, sectors where consistent chip supply underpins products ranging from vehicles to factory equipment and connected devices.

U.S. Commerce Department to Take About 4% Equity

Under a separate agreement, the U.S. Commerce Department will take an equity stake equivalent to about 4% of GlobalFoundries. The company will also redirect $955 million from a CHIPS Act award toward optical chips, silicon-germanium work and advanced chip packaging in New York and Vermont. GlobalFoundries says those projects support data centers and communications equipment. The arrangement reflects a shift in U.S. chip funding from grants toward equity positions — an approach in which the government holds an ownership stake whose value tracks the company, rather than receiving a fixed payout.

Trading and Sector Context

At 7:20 p.m. London time, GFS traded at $48.805, compared with Tuesday's close of $46.70. The quote was delayed and was taken during Wednesday's U.S. session, not at the official close. GlobalFoundries trades on the Nasdaq exchange. Despite Wednesday's gain, shares remain below their July 10 closing price of $68.97, though they have moved back above the September 15 low close of $42.75.

The announcement comes during a mixed week for chipmakers. Applied Materials shares fell on October 13 despite demand for AI chips, and Micron shares declined after a warning from Broadcom, while other semiconductor stocks also moved sharply. The broader semiconductor market has seen uneven trading in recent sessions. Separately, Intel's foundry business faces questions over losses and funding. Wednesday's move in GFS was tied to a company-specific funding announcement rather than a broad sector trend, and the project's near-term markers include the planned start of Malta construction later this year, any confirmation of the second $10 billion tranche, and the first plant's 2029 operating target.

Source: Blockonomi