Japan Is Spending $21 Billion to Bring America’s Chip Boom Home Srividya Kalyanaraman Wed, October 14, 2026 at 1:14 PM EDT 2 min read NVDA -3.05% GFS +5.35% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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Tokyo is investing money in the U.S. that it expects will return home eventually. Japan will invest up to $21 billion in two New York state chip factories, which will be jointly owned by the U.S. and Japan and operated by GlobalFoundries (GF). This is part of the $550 billion pledge Japan made to Trump to avoid tariffs on automobiles.
Leading chip manufacturer GF will operate the two new proposed plants in its New York Campus. The $20 billion will possibly back two 300mm fabs that are targeted for 2029, with each fab adding about 900,000 wafers of annual capacity, roughly 27,000 construction and ecosystem jobs plus more than 1,000 manufacturing jobs, per GF's own estimates. GF earns fees for building and operating the plants and licensing its technology.
Washington will take a 4% stake in the company, bringing its total ownership to about 7% in the company.
The deal's a win for both parties. Tokyo is paying for Washington's equity in GF, and giving a thumbs up to the CHIPS Act of 2022. which, by the way, has more private patronage at this point than federal money. TSMC alone has committed $265 billion to U.S. investment.
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For Tokyo, the tariff relief is big, but not as big as capital flowing back home. Japan makes the machines that make the chips and wafers, which means any new factory is placing orders at Tokyo Electron and other Japanese suppliers. It fits well with its own chip expansion agenda. Not long ago, both Kioxia and SanDisk outlined more than $31 billion of investment in Japan through 2032.
But in America, Trump selects the projects Japan funds, and free cash flows are split evenly until a target allocation is reached, after which 90% goes to the U.S. Japan supplies capital and the US supplies direction and takes most of the long-run returns.
But Tokyo is willing to accept it as a price for a drama-free trade relationship. And a stable tariff environment.
For now, only the first $10 billion is firm. The second is "envisaged." No details have been given yet, but one can expect chips and AI would carry significant weight in upcoming U.S.-Japan talks. The only loose end here is how the ownership splits and how the cash-flow waterfall applies to these plants.
