GlobalFoundries plans to build two chip plants in Japan with support of up to $21 billions.

GlobalFoundries plans to build two new chip factories in Japan with up to $21 billion in funding support from the Japanese government. As part of the related agreement, the U.S. government will also acquire about 4% of the company's shares. According to the agreement announced on Wednesday, GlobalFoundries will operate two jointly-owned factories in its existing facility in upstate New York, held by the United States and Japan. The construction funds will come from the $550 billion investment previously promised by Japan to the U.S. The new factories will produce so-called "foundational chips," semiconductors that are widely used in automobiles, industrial equipment, and communications devices. These chips are technically less complex but are essential. As electronic components are increasingly used in various products, the demand for these chips continues to grow, and chip manufacturers are working to expand supply. The AI boom has also exacerbated supply tightness, as the semiconductor industry diverts more resources to advanced chips such as Nvidia AI accelerators. This GlobalFoundries agreement aims to increase foundational chip production in the U.S. and reduce dependence on East Asian suppliers to address U.S. national security concerns.