Japan may fund two GlobalFoundries fabs with up to $21 billion while Washington's stake reaches 8%

Japan pays, the governments own, GF runs

GlobalFoundries▼−5.15% — GlobalFoundries, down 5.15 percent today breaks ground this quarter on two chip fabs at its Malta, New York campus that it will build, staff and run but never own ¹². Japan supplies up to $21 billion, about $10 billion per fab↗, from its $550 billion US investment pledge ³⁴. A special-purpose vehicle owned by the US and Japanese governments funds the plants and holds the tooling ¹.

GF earns construction, operating and technology-licensing fees plus a share of the fabs' future EBITDA, with first wafers due in 2029↗ ¹. Returns on the state capital split evenly between Washington and Tokyo up to a defined ceiling, then run 90% to the US ³. Each fab adds about 900,000 300mm wafers a year at full ramp, together roughly a tenth of all US wafer capacity ¹².

The grant that became equity

The same week, the Commerce Department converted aid into ownership↗ ⁵. A new stake of about 4% lifts Washington's total holding toward the 8% that President Trump values at about $2 billion ⁵⁷. In parallel, $955 million of GF's CHIPS Act subsidy shifts from fab expansion into silicon photonics, silicon germanium and the first US-based source of silicon interposers ¹⁶.

GF's own US capital program rises to $5 billion↗ ⁶. The White House also picks which projects receive Japanese capital under the initiative ⁷. Mubadala, Abu Dhabi's sovereign wealth fund, still controls the company; only about 148 million of 557 million shares are free to trade ⁸.

A fee stream against a foundry multiple

CFO Sam Franklin pegs GF's take near $3 billion of cumulative free cash flow over ten years, adding 30 to 50 basis points to 2027 gross margin and $0.10 to $0.15 to earnings per share, figures he tied to unsigned definitive agreements ¹. The brokerage Wedbush calls the stream multidecade ⁹. BNP Paribas analyst Karl Ackerman counters that the deal shows how far GF's growth leans on government intervention rather than free-market competitiveness ¹⁰.

The nearer AI money sits on the same campus: a $2 billion deal signed on October 8↗ to make silicon interposers, the layers that sit under AI processors and memory inside TSMC's▼−2.33% — TSMC, down 2.33 percent today CoWoS, its chip-on-wafer-on-substrate packaging ¹¹. The initial term runs five years, with volume production from the first half of 2028 at the earliest ¹⁰¹¹.

That business lands on gross margins that ran 28.3% in the June quarter ¹². The market has repriced the deal once already: a 15% pre-open surge on October 14↗ closed up 4.8% at $48.94, and by October 16 GFS sat at $46.68, down 4.27% on the day and roughly back to its pre-announcement price ¹³⁸.

Groundbreaking, signatures and the fee schedule

Ground must move by year-end, and the November earnings call owes investors the fee schedule and the stake mechanics; management says it expects no further US equity ¹⁸. Half the Japanese money is an upper limit with a gate: the second fab carries about $10 billion more, but only after a stakeholder go/no-go decision before the end of 2028 ¹⁸. Mubadala of Abu Dhabi controls the company, Washington holds nearly 8% of it and Tokyo funds the fabs; the outside shareholders hold a fee schedule.