Japan is about to become one of the biggest funders of American chipmaking. Tokyo will invest up to $21 billion in as many as two chip factories in New York state, Reuters reports, in a deal that puts iPhone chips on the list of things that could soon be made in upstate New York.
The factories will be jointly owned by the U.S. government and Japanese interests and operated by GlobalFoundries, the Malta, New York-based chipmaker. Construction on the first plant is scheduled to begin this year, with chips rolling off the line in 2029.
Japan pays, Washington picks
The investment is part of the $550 billion Japan-U.S. investment package struck last year, in which Tokyo agreed to fund American projects in exchange for the U.S. lowering tariffs on Japanese cars and other imports from at least 25% to 15%. Under the arrangement, Japan provides all of the investment capital — and President Trump personally selects which projects get funded.
The ownership structure is the striking part. The U.S. will take a stake in the new factories themselves, and in a separate agreement the government will raise its holding in GlobalFoundries from 3% to about 7%. Trump said on Truth Social that the government, which previously gave the company $1.63 billion in grants, values that 7% stake at more than $2 billion: “We are the first administration ever to turn grants into money for America.”
Your next iPhone could be New York-made
GlobalFoundries CEO Tim Breen told Reuters the first customers for the new factories include Japan’s Renesas Electronics and Apple — the iPhone maker. Priority will go to American and Japanese customers, Breen said, with others considered later.
The numbers are substantial: the first factory is expected to add annual U.S. capacity of about 900,000 300mm wafers when fully operational, ranking it among the largest semiconductor plants in the country, and create more than 1,000 factory jobs in New York. A decision on whether to build the second factory comes before the end of 2028. GlobalFoundries, which is majority-owned by Abu Dhabi’s Mubadala sovereign wealth fund, will earn fees for building and operating the plants plus licensing its manufacturing technology. Nikkei Asia notes the company’s shares rose more than 4% on the news and are up over 39% this year.
Why this matters
Strip away the press-release language and three things make this unusual. First, a foreign government is fully bankrolling U.S. fabs on terms where Washington picks the projects and takes equity — a model closer to a sovereign wealth deal than a subsidy. Second, the U.S. government is quietly becoming a shareholder in a chipmaker, converting $1.63 billion in grants into a stake it claims is worth more than $2 billion. If that arithmetic holds, it rewrites the industrial-policy playbook for every CHIPS Act recipient watching.
Third, the timeline. Chips in 2029 means this is a three-year bet placed on a bet: that demand for U.S.-made chips — from Apple, from automakers, from defense — will still be surging when the cleanrooms finally light up. The tariff deal that funded it was struck in 2025; the factories it buys won’t produce a single wafer until 2029. That gap is where the real story lives.
Meanwhile in Tech News: AI money keeps moving in strange ways — Character.AI just filed for Chapter 11 with Disney circling a $20M bid — and the FBI arrested an OpenAI engineer over an alleged office listening device.
