Japan to invest up to USD21bn in two US chip factories to be run by GlobalFoundries

Business Recorder reported that Japan will put up to USD21 billion into a pair of chip plants in New York state, based on GlobalFoundries' announcement on Wednesday. Both plants will have joint ownership involving the American government and Japanese investors, with GlobalFoundries running them. Japan will fund the whole investment, while the US takes a stake in the facilities.

The project forms part of a USD550 billion investment pledge that Japan agreed with the Trump administration last year, in exchange for Washington cutting duties on Japanese vehicles and goods from a minimum of 25 percent down to 15 percent. GlobalFoundries, majority-owned by Abu Dhabi's Mubadala Investment Co, stands to collect charges for constructing and running the plants, plus income from licensing its chipmaking technology to them. Separately, Washington is set to acquire 4 percent of the chipmaker, which would push its total holding to around 7 percent, per CEO Tim Breen speaking to Reuters.

Breen said GlobalFoundries will handle customer relationships, with Japan's Renesas Electronics and Apple among the first customers for the New York plants. He anticipates that American and Japanese buyers will be favoured, though other firms could join demand later once terms are finalised. Some of Japan's capital is also expected to reach toolmakers such as Tokyo Electron and other Japanese firms.