Japan picks GlobalFoundries-led $21 billion chip project for U.S. funding

Under the tariff agreement concluded last year, Japan pledged to provide the United States with $550 billion in investment and loans in exchange for U.S. tariff cuts on imports from Japan. The GlobalFoundries-led project is the third round selected under that framework, with two new plants set to be built in the state of New York. Japan will provide investment, loans and loan guarantees through government-affiliated financial institutions for the construction of the first plant, which involves some $10 billion in investment, and construction is slated to begin this year.

According to the Ministry of Economy, Trade and Industry, two companies including Tokyo Electron are expected to supply chip-manufacturing equipment, while Tokyo Ohka Kogyo will provide components and materials. Renesas Electronics Corp. and two midsize companies will also participate, with Renesas planning to buy products made at the plants. Akazawa said the benefits are expected to also reach small and midsize companies that support the supply chain.

Akazawa emphasized that the project will strengthen the capability to manufacture semiconductors essential in various areas including AI data centers, and will also enhance economic security in both countries. The project is positioned as part of the broader Japan-U.S. effort to secure a competitive advantage in the age of artificial intelligence.