GlobalFoundries (NASDAQ:GFS) said it has been selected to provide technology and operate two new 300-millimeter semiconductor fabs planned for its Malta, New York campus, under an investment framework of up to $21 billion funded by Japan through the U.S.-Japan trade agreement.
Chief Executive Officer Tim Breen called the initiative “one of the most consequential announcements” in the company’s history. Under the proposed structure, GlobalFoundries would provide differentiated manufacturing technologies, manage fab construction and operate the facilities, while a dedicated special-purpose vehicle owned by the U.S. and Japanese governments would fund and own the fab infrastructure and tooling.
Two-Phase Malta Expansion
The program is designed in two phases on land adjacent to GlobalFoundries’ existing Fab 8 facility. Each phase is expected to add about 900,000 300-millimeter-equivalent wafers of annual capacity once fully operational.
The first phase is shovel-ready, according to Breen, with permitting, environmental approvals and core infrastructure in place. The company said it has lined up key suppliers and has begun early site-enablement work. It expects to break ground during the current quarter, have the fab ready for equipment in 2028 and produce first wafers in 2029.
A decision on whether to proceed with the second fab is expected before the end of 2028. The project is expected to have a minimum term of 20 years.
The new facilities are expected to produce chips based on GlobalFoundries’ FDX, BCD and UX platforms. Breen said FDX serves edge and physical AI computing uses, BCD addresses power-management needs including those associated with AI data centers, and UX supports industrial and connected-infrastructure applications. The company may add other technologies over time depending on market conditions and customer requirements.
Domestic Capacity and Economic Impact
Breen said the two fabs are expected to increase total U.S. wafer capacity by roughly 10%, potentially making Malta one of the country’s largest semiconductor clusters. GlobalFoundries expects the initiative to create about 27,000 construction and ecosystem jobs, along with more than 1,000 high-skilled manufacturing positions in New York’s Capital Region.
The company said the project is intended to reduce reliance on geographically concentrated overseas semiconductor supply for the U.S., while offering Japanese companies access to U.S.-based capacity and reducing geographic concentration and trade exposure.
GlobalFoundries cited its operating history in Malta and a 2023 Singapore brownfield expansion, which it said was completed ahead of plan and on budget, as evidence of its ability to execute large-scale fab projects.
Fee Model and Expected Financial Benefits
Franklin said the government-owned special-purpose vehicle would cover project development, construction, ramp operations, technology and management-fee requirements. GlobalFoundries would receive technology fees, construction-management fees, operating-management fees, reimbursements for allocated shared services and infrastructure, and a share of future EBITDA generated by the vehicle.
Technology fees are expected to begin in 2027 and continue for at least 20 years. Construction-management fees would be earned during the build-out period, while operating-management fees would begin as the first fab comes online around 2029 and rise as production ramps.
Upon final closing of the agreements, GlobalFoundries expects approximately $50 million in revenue contribution in 2027. The company projected annual gross-margin accretion of 30 to 50 basis points in 2027, increasing to 100 to 200 basis points over the long term. It expects operating-margin accretion of 100 to 200 basis points in 2027 and 200 to 300 basis points over the longer term.
GlobalFoundries also forecast earnings-per-share accretion of $0.10 to $0.15 in 2027, growing to $0.50 to $0.75 over the long term, along with approximately $3 billion in cumulative free cash flow from technology and fab-management services over the next decade.
CHIPS Funding and Government Equity Stake
Separately, Breen said the U.S. Department of Commerce CHIPS Program Office has agreed to repurpose $955 million of previously awarded CHIPS funding toward research and development and capital expenditures beginning in 2027. Those investments are intended to support work in silicon germanium, silicon photonics and interposer technologies for AI data centers.
The Department of Commerce will also receive an equity stake in GlobalFoundries of approximately 4%, Breen said. He added that the company does not expect further U.S. government equity participation beyond the announced arrangement.
About GlobalFoundries (NASDAQ:GFS)
GlobalFoundries Inc is a semiconductor contract manufacturer that produces chips for customers without owning their own fabrication facilities. The company operates as a pure-play foundry, manufacturing semiconductors based on customers’ designs and supporting them through process development, wafer fabrication, packaging, and related services.
Its technology portfolio focuses on specialized semiconductor platforms rather than the most advanced leading-edge logic nodes. Products and services include radio-frequency technologies, analog and mixed-signal solutions, power management, embedded memory, silicon photonics, and automotive and industrial semiconductor platforms.
