Japan plans to invest up to $21 billion in the construction of two semiconductor manufacturing plants in New York state, United States. The project was announced by GlobalFoundries, whose majority owner is Abu Dhabi sovereign wealth fund Mubadala Investment, The Japan Times reports.

The investments are part of Japan’s commitment to invest $550 billion in the United States in exchange for lower tariffs. Tokyo and Washington reached this agreement in July 2025. Under its terms, investment projects are selected by the U.S. president rather than the Japanese side.

Plant financing

Japan still needs to arrange financing for the construction of the plants. Loans for the project are to be provided by the state-owned Japan Bank for International Cooperation and commercial banks, while guarantees are to be provided by Nippon Export and Investment Insurance.

According to the publication, Japanese banks are reluctant to participate in the financing because of the high cost of raising substantial amounts of U.S. dollars. Tokyo is seeking assistance from JPMorgan and other U.S. banks. Other projects under the investment commitment include investments in the oil and gas industry, as well as small nuclear reactors.

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Japanese equipment manufacturers, including Tokyo Electron, are expected to benefit from the construction. GlobalFoundries CEO Tim Breen has said that Renesas Electronics will be among the plants’ customers.

Impact on Japan’s industry

Experts interviewed by the publication believe that U.S. investments will only provide limited help to Japan in rebuilding its own chip manufacturing sector and strengthening supply chain resilience. White Oak Capital Chief Investment Officer Nori Chiou noted that Japan is financing U.S. manufacturing capacity without necessarily gaining the advanced technologies or domestic production capabilities it seeks.

At the same time, Tokyo supports semiconductor production within the country. The flagship project is Rapidus, which intends to begin mass production of advanced chips next year. The government has also provided subsidies to TSMC, Micron and Kioxia to locate manufacturing capacity in Japan and supports Noetra, a company working in robotics and artificial intelligence.

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