GlobalFoundries Inc. (GFS) stock traded higher Wednesday after the company announced plans to operate two new semiconductor fabs in New York under a U.S.-Japan initiative providing up to $21 billion in funding.

The announcement strengthens GlobalFoundries’ growth outlook by adding major U.S. production capacity backed by Japanese funding, while limiting the company’s direct capital burden.

The gain came despite broader weakness, with the Technology sector down 1.6% and the S&P 500 falling 0.8%.

First Fab Targets 2029

Japan will fund the initiative, while GlobalFoundries will provide the technology, manufacturing expertise and operating capabilities.

An initial investment of about $10 billion will support a new 300mm fab expected to begin operations in 2029. Another roughly $10 billion could fund a second facility.

Each fab is expected to add about 900,000 300mm wafers of annual U.S. manufacturing capacity when fully operational.

GlobalFoundries expects to break ground on the first fab later this year. The broader project could create about 27,000 construction and ecosystem jobs and more than 1,000 manufacturing jobs.

CHIPS Funding, Government Stake

GlobalFoundries also agreed with the U.S. Department of Commerce to reallocate $955 million from its existing CHIPS and Science Act award toward silicon photonics, silicon-germanium and advanced packaging investments in New York and Vermont.

Under a separate agreement, the Commerce Department will receive an approximately 4% equity stake in GlobalFoundries.

CEO Tim Breen said, "This is a bold new initiative for semiconductor manufacturing, bringing together the United States and Japan with GF’s differentiated technology and decades of manufacturing expertise to accelerate trusted capacity in New York."

Manufacturing Push Expands

The announcement follows other recent manufacturing agreements.

Earlier in October, GlobalFoundries signed a $2 billion agreement with Taiwan Semiconductor Manufacturing Co. (TSM) to supply U.S.-made silicon interposers for advanced AI chip packaging and partnered with Xanadu on components for utility-scale quantum computers.

GFS Stock Price Activity: Globalfoundries shares were up 4.82% at $48.95 at the time of publication on Wednesday, according to market data.