--- title: "GlobalFoundries breaks ground on a $10 billion Japan-funded New York fab it will run for fees" description: "Japan is putting up as much as $21 billion for two fabs GlobalFoundries will run but not own; the record margins came from photonics on fabs it already has." publisher: "The Inference" section: "Chips" published: 2026-11-14T14:16:14.819Z modified: 2026-11-14T14:16:14.819Z canonical: https://theinference.org/article/globalfoundries-breaks-ground-on-a-10-billion-japan-funded-new-york-fab-it-will-run-for-fees language: en keywords: "GlobalFoundries, Semiconductors, Silicon Photonics, Japan, CHIPS Act" --- # GlobalFoundries breaks ground on a $10 billion Japan-funded New York fab it will run for fees > Japan is putting up as much as $21 billion for two fabs GlobalFoundries will run but not own; the record margins came from photonics on fabs it already has. On Friday, November 13, [GlobalFoundries](https://theinference.org/markets/companies/globalfoundries) chief executive Tim Breen stood with New York Governor Kathy Hochul and Japan's consul general in New York, Hiroyuki Mase, to break ground on Fab 8.2, the first of two 300mm chip plants at the company's Luther Forest Technology Campus in Malta, New York [1][2][3]. The two-fab program is worth up to $21 billion; the first fab costs about $10 billion, comes online in 2029 and adds roughly 900,000 wafers a year of capacity for automotive, industrial and connected-infrastructure chips [1]. ![Officials in suits shovel dirt in front of a yellow excavator at GlobalFoundries' groundbreaking, with red and blue smoke spelling "I heart NY" in the sky](https://storage.googleapis.com/theinference-public/img/18b8cc2615d26e26.jpg) *GlobalFoundries, New York State and Japanese officials broke ground on Fab 8.2 at the Luther Forest Technology Campus in Malta, New York, on November 13, 2026. (GlobalFoundries via LinkedIn)* New York State adds $570 million in Green CHIPS tax credits plus a separate $35 million in grants for workforce and infrastructure [1][3], and GF has committed $60 million in direct community investments [2]. Site manager Grant McEwan told the ceremony the numbers "represent something simpler: confidence" [3]. The program promises about 27,000 construction and ecosystem jobs and more than 1,000 high-skilled manufacturing jobs [1]. ## Japan funds the fabs, GF runs them for fees Japan will provide the investment, while GF contributes its technology and manufacturing expertise as technology provider and operator [1][6]. [GF's own results release](https://www.marketscreener.com/news/globalfoundries-reports-third-quarter-2026-financial-results-ce785fdfdb89fe26) puts a shape on the return: compensation "through management and technology fees over the life of the project" [4]. [Tech Times](https://www.msn.com/en-us/news/other/japan-funds-globalfoundries-runs-21-billion-fab-deal-debuts-allied-nation-model/ar-AA2einwO) reports the fabs will be jointly owned by the U.S. government and Japanese interests, not by GF, and that the profit-sharing terms are expected in further regulatory filings that have not yet arrived [7]. Washington's side is priced. The U.S. Department of Commerce reallocated $955 million of GF's CHIPS award toward silicon photonics, silicon germanium and advanced packaging at Malta and Burlington, Vermont, and [receives about 4% of GF's equity](https://theinference.org/article/japan-buys-the-fabs-globalfoundries-runs-them-washington-takes-4) [6][9]. ## Government ownership is heading toward 7% The 9.9 million shares GF issued to the government in September [drove a $441 million non-cash charge](https://theinference.org/article/globalfoundries-booked-a-441-million-charge-for-us-government-shares-and-washington-can-sell-them), the main reason for a $270 million net loss on IFRS, the international accounting standard GF reports under [4]. Government ownership is heading toward about 7% of a company Mubadala, Abu Dhabi's sovereign wealth fund, still holds 82% of [5][8]. [Renesas](https://theinference.org/markets/companies/renesas-electronics), the Japanese chipmaker, says it is "planning around GF's new capacity in New York" as an extension of its own production footprint, the nearest thing to a committed customer either release names [6]. [The Inference laid out this structure in September](https://theinference.org/article/globalfoundries-may-run-a-19-billion-fab-it-never-has-to-build), when the fab was still a plan. ## The record quarter came from fabs GF already owns Third-quarter revenue was $1.899 billion, up 13% year over year, with record non-IFRS gross margin of 31.4%, up 540 basis points [4]. Non-IFRS strips out items such as the government share charge; on the IFRS measure the chart below uses, gross margin was 30.1%, the best in three years of filings [4]. Communications and data center revenue rose 81% year over year, to about 17% of the total, on silicon photonics and silicon germanium for AI data centers [5]. GF expects $500 million of photonics revenue this year, a $1 billion annualized run rate by the end of 2027, a year ahead of plan, and says that capacity is fully booked through 2027 [5]. That run rate is due before Fab 8.2 makes its first wafer [1]. *Chart: **Gross margin has climbed from 22.4% to 30.1%, the best quarter in three years** Line chart of GlobalFoundries quarterly IFRS gross margin from Q4 2023 to Q3 2026, falling to 22.4 percent in Q1 2025 then climbing to 30.1 percent in Q3 2026.* *IFRS gross margin, percent of revenue, from GlobalFoundries' quarterly SEC filings. Up 7.7 points from the Q1 2025 low. [10]* ## The fee schedule is still unwritten [Morgan Stanley](https://theinference.org/markets/companies/morgan-stanley)'s [October 15 note](https://gmteight.com/flash/detail/1557465) calls the deal an expansion of earnings potential without capital expenditure, at the only scaled foundry the United States has [9]. GF's own plan is the counterweight: about $4 billion of net capex in 2027, a third of it covered by customer prepayments, and a 40% gross margin target for the end of 2028, all on fabs GF already owns [5]. *Chart: **Operating cash has covered GlobalFoundries' own capex in 11 of the last 12 quarters** Column chart comparing GlobalFoundries quarterly capital spending with operating cash flow from Q4 2023 to Q3 2026, in billions of dollars. Operating cash flow runs above capex in every quarter but Q2 2026, when capex of 0.41 billion edges past operating cash of 0.41 billion.* *Quarterly capital spending and cash from operations, $ billions, from GlobalFoundries' SEC filings. Capex topped operating cash only in Q2 2026, before the 2027 step-up to about $4 billion of net capex. [10]* Watch the filings that carry the fee schedule and the ownership split [7], and the end-2027 photonics run rate [5]. Until those filings arrive, what is certain about Malta is the $21 billion of spending and the jobs [7][5]. What GlobalFoundries earns from it is not. ## Takeaway Japan is putting up as much as $21 billion for two Malta, New York fabs that GlobalFoundries will run, not own. The record 30.1% IFRS gross margin that carried the quarter came from photonics on fabs it already runs. ## Sources 1. [GlobeNewswire via Yahoo Finance, "GlobalFoundries breaks ground on first new semiconductor fab under landmark U.S.-Japan initiative," 13 November 2026](https://finance.yahoo.com/technology/articles/globalfoundries-breaks-ground-first-semiconductor-163000087.html) 2. [WNYT, "GlobalFoundries breaks ground on new semiconductor manufacturing plant," 13 November 2026](https://wnyt.com/top-stories/globalfoundries-breaks-ground-on-new-semiconductor-manufacturing-plant/) 3. [Troy Record, "GlobalFoundries breaks ground on new $10 billion semiconductor facility in Malta," 13 November 2026](https://www.troyrecord.com/2026/11/13/globalfoundries-breaks-ground-on-new-10-billion-semiconductor-facility-in-malta/) 4. [GlobeNewswire via MarketScreener, "GlobalFoundries Reports Third Quarter 2026 Financial Results," 4 November 2026](https://www.marketscreener.com/news/globalfoundries-reports-third-quarter-2026-financial-results-ce785fdfdb89fe26) 5. [GuruFocus via Yahoo Finance, "GLOBALFOUNDRIES Inc (GFS) (Q3 2026) Earnings Call Highlights: Record Margins, Silicon Photonics," 4 November 2026](https://finance.yahoo.com/technology/articles/globalfoundries-inc-gfs-q3-2026-211124435.html) 6. [GlobeNewswire via Yahoo Finance, "GlobalFoundries selected to operate two new semiconductor fabs in New York under landmark U.S.-Japan initiative," 14 October 2026](https://finance.yahoo.com/technology/articles/globalfoundries-selected-operate-two-semiconductor-123000761.html) 7. [Tech Times, "Japan funds, GlobalFoundries runs: $21 billion fab deal debuts allied-nation model," 15 October 2026](https://www.msn.com/en-us/news/other/japan-funds-globalfoundries-runs-21-billion-fab-deal-debuts-allied-nation-model/ar-AA2einwO) 8. [Wikipedia, "GlobalFoundries" (Mubadala 82% owner; Tim Breen CEO since 2025), retrieved 14 November 2026](https://en.wikipedia.org/wiki/GlobalFoundries) 9. [Zhitong Finance via GMT Eight, "GlobalFoundries (GFS.US) Secures U.S.-Japan Support to Expand U.S. Capacity; Morgan Stanley: Asset-Light Expansion Expected to Boost Profitability," 13 November 2026](https://gmteight.com/flash/detail/1557465) 10. [GlobalFoundries, quarterly figures from its SEC filings, retrieved 14 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001709048) --- GlobalFoundries breaks ground on a $10 billion Japan-funded New York fab it will run for fees — The Inference. 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