GlobalFoundries (GF), a major U.S. semiconductor foundry, announced on the 14th that it will construct a new semiconductor fab in New York State in the eastern United States. The project falls under the investment and financing framework to the U.S. agreed upon by the Japanese and U.S. governments during tariff negotiations, with Japanese companies participating on both the procurement and equipment supply sides. The project scale is expected to reach up to approximately $21 billion (about ¥3.3 trillion).

The new fab represents the third tranche of the $550 billion (approximately ¥87 trillion) in investment and financing to the U.S. that the Japanese government committed to during tariff negotiations in July of last year. The facility will produce semiconductors for automotive, industrial equipment, and communications infrastructure applications, supplying Renesas Electronics (6723.T). Manufacturing equipment will be delivered by Tokyo Electron (8035.T).

Renesas is moving toward procuring logic semiconductors used for computational processing from the facility. In February, Renesas and GF announced a joint manufacturing arrangement for next-generation automotive semiconductors, and the new fab will give concrete form to that partnership. Tokyo Electron ranks fourth globally in semiconductor manufacturing equipment sales.

Strengthening Japan-U.S. Supply Chains

With advanced semiconductor production concentrated in Taiwan and South Korea, the initiative aims to strengthen Japan-U.S. supply chains and prepare for geopolitical risks such as a Taiwan contingency. For Japan, there is also the benefit of diversifying disaster risk, given that some domestic semiconductor fabs concentrated in the Kyushu region were forced to halt operations following the Kumamoto Earthquake in July.

With the U.S. midterm elections approaching in November, the Trump administration is eager to accumulate a track record of investment and financing deals to the U.S. that can appeal to voters. Meanwhile, the Japanese government intends to actively leverage the framework as an opportunity to strengthen economic security through supply chain resilience while encouraging overseas expansion of Japanese companies with strengths in areas such as semiconductor manufacturing equipment.

Progress on Investment and Financing to the U.S.

To date, agreements have been reached on a total of six projects under the investment and financing framework to the U.S., amounting to $109 billion (approximately ¥17 trillion), representing roughly 20% of the overall commitment. Fund transfers have already been completed for projects including synthetic diamond manufacturing and gas-fired power generation. On the other hand, among the first tranche of projects, the export infrastructure development for U.S.-produced crude oil saw its port business approval revoked.

Key Progress on Investment and Financing to the U.S.DetailsAgreed projects6 projects totaling $109 billion (approx. ¥17 trillion)Overall progress rateApproximately 20%Projects with completed fund transfersSynthetic diamond manufacturing, gas-fired power generation, and othersThird tranche (this announcement)GF’s new semiconductor fab in New York State, up to $21 billion

Note: The number and value of agreed projects are as of the period before the third tranche announcement.

In addition, discussions continue on structuring a project for the construction of next-generation small modular reactors (SMRs).