Semiconductor chips on a circuit board of a computer, in this illustration picture taken on Feb. 25, 2022. Florence Lo /Reuters
Japan will invest up to $21 billion to build two chip factories in New York state under a trade agreement with U.S. President Donald Trump’s administration, as Washington seeks to expand domestic semiconductor production.
They will be jointly owned by the U.S. government and Japanese interests and operated by GlobalFoundries, the company said on Oct. 14.
Construction of the first factory is scheduled to begin this year, with chip production expected in 2029. GlobalFoundries executives said the partners will decide whether to build the second factory before the end of 2028.
The initiative was part of a deal struck by the Trump administration last year for Japan to invest $550 billion in the United States. In return, the United States lowered its import tariff rate on Japanese cars and other imports from a threatened 25 percent to 15 percent.
“This is a bold new initiative for semiconductor manufacturing, bringing together the United States and Japan with [GlobalFoundries’] differentiated technology and decades of manufacturing expertise to accelerate trusted capacity in New York,” said Tim Breen, CEO of GlobalFoundries, in a statement.
“[GlobalFoundries] was selected because fabs of this scale require more than capital. They require differentiated technology, operational excellence and a proven ability to execute.”
The U.S. government previously held a 3 percent stake in GlobalFoundries.
Breen said that would rise to 7 percent. Japan will provide all of the investment capital under the deal.
The first site in Malta, New York, is expected to add approximately 900,000 wafers (300-millimeter wafers) of annual U.S. manufacturing capacity when fully operational.
A second would add the same amount.
“President Trump’s historic U.S.–Japan Trade Deal is delivering another massive manufacturing investment into America,” Secretary of Commerce Howard Lutnick said.
Japanese Trade Minister Ryosei Akazawa told reporters on Oct. 15, “We believe that working together with the U.S. to expand semiconductor production capacity is highly significant for enhancing the economic security of both countries.”
The Malta site will create thousands of construction jobs and support more than 1,000 highly skilled manufacturing jobs in the New York semiconductor industry, New York Gov. Kathy Hochul said.
China has sought to develop its own semiconductor industry, while retaining access to foreign-owned chipmaking facilities in mainland China and Taiwan, which the United States has attempted to restrict via export controls, according to a 2025 Congressional Research Service report.
According to a 2023 Congressional Research Service report, nearly 90 percent of the world’s leading-edge semiconductor production is concentrated in the self-governed democratic island of Taiwan, which the Chinese Communist Party claims as its own territory.
According to the White House, the United States consumes roughly one-quarter of the world’s semiconductors, but currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains.
Trump has taken action on semiconductors by imposing tariffs on advanced chips and taking measures to encourage manufacturing in the United States. He has concluded semiconductor-related agreements with at least three major partners, including Japan, Taiwan, and South Korea.
The U.S. Commerce Department announced a massive U.S.–Taiwan chips deal on Jan. 15.
It
a minimum of $250 billion in direct investment from Taiwanese tech enterprises in chips, energy, and artificial intelligence innovation in the United States, as well as credit guarantees by the Taiwanese government for another $250 billion in other Taiwanese investments to expand the chip supply chain in the United States.
On June 9, South Korea agreed to $200 billion in direct investment in strategic U.S. industries, including semiconductors, AI, pharmaceuticals, American oil and natural gas, and critical minerals.
Reuters, Melanie Sun, Catherine Yang, Eva Fu, and Frank Fang contributed to this report.
