Japan and the United States are holding working-level talks on building a semiconductor fabrication plant on American soil that could cost between 2 trillion and 3 trillion yen, equivalent to roughly $12.8 billion to $19.3 billion. US contract chipmaker GlobalFoundries is expected to operate the facility, which would produce logic semiconductors.
A chip plant under the tariff deal
Japan and the United States are in talks to build a semiconductor plant in the US as one of Japan’s $550 billion of investment projects under the tariff agreement between the two countries, officials of both governments familiar with the negotiations have told Nikkei. The project was proposed by Washington, and officials are now discussing how the investment could be recouped, among other topics, Nikkei reported on Thursday, citing officials from both governments.
Japan’s tariff-related investments have so far centered on power projects, so the chip plant would mark an expansion into technology and manufacturing. Details including the factory’s location, construction schedule and final investment structure have not yet been disclosed.
GlobalFoundries shares rose over 2 percent in premarket trading on Thursday after Nikkei broke the story. The stock has gained more than 23 percent year to date.
GlobalFoundries’ growing US footprint
The proposal would mark GlobalFoundries’ latest tie to state-backed chip investment. The company finalized a $375 million Commerce Department award in September for its Quantum Technology Solutions unit, adding to a July letter of intent for a proposed $300 million silicon photonics award.
GlobalFoundries reported revenue of $1.786 billion for the second quarter ended June 30, 2026, with a non-IFRS gross margin of 29.9 percent and net income of $167 million. Communications infrastructure and data center revenue surged 62 percent year over year in that quarter.
CEO Tim Breen said GF delivered strong results in the second quarter, with revenue and non-IFRS gross margin exceeding the high end of guidance ranges. The company continues to see accelerating customer demand and revenue growth across its strategic growth drivers, including optical networking within the AI data center.
GlobalFoundries, headquartered in Malta, New York, specializes in mature and differentiated semiconductor process nodes rather than the leading-edge nodes pursued by TSMC and Samsung. That positioning makes it a natural candidate for the kind of broadly capable logic production that both the US and allied governments want to secure domestically, particularly for defense, automotive and communications supply chains.
The company’s existing US fabs in Malta, New York, and Essex Junction, Vermont give it an established domestic manufacturing base from which a new, Japan-backed plant could extend capacity significantly.
Supply-chain politics and semiconductor scale
The proposed plant fits into a broader pattern of allied nations using trade and investment agreements to anchor semiconductor production closer to home. The scale of the proposed Japan-US plant would place it alongside TSMC’s Arizona expansion as one of the largest individual fab projects announced in North America.
The reliance on a US-headquartered operator like GlobalFoundries is also notable: Washington has consistently pushed to keep operational control of sensitive manufacturing assets inside American corporate structures, a principle embedded in the CHIPS Act framework that has underpinned earlier awards to the company.
What happens next
The discussions remain at a working level, and neither government has set a timeline for a final decision. Key open questions include site selection, which US state or region would host the facility, and how Tokyo’s capital would be structured, whether as equity, loans or grants.
Officials must also settle which product lines GlobalFoundries would prioritize. The scale of the investment means any formal agreement would likely require legislative sign-off in both countries.
The talks arrive as Washington continues to tighten export controls on advanced chip technology. That environment makes securing allied investment in domestic fabs politically attractive on both sides: Japan gains a durable manufacturing link to the US market, and the US adds capacity without relying on federal appropriations alone.
Analysts tracking AI-driven semiconductor infrastructure spending have noted that demand for logic chips across automotive, industrial and data-center segments is growing faster than existing Western capacity can absorb, giving any new plant a ready order book well before its first wafer ships.
