Japan to fund $21B semiconductor factories in New York for automakers

System semiconductors used in automobiles and telecommunications devices will be produced at chip factories Japan plans to build in New York state with an investment of up to $21 billion. Japanese automakers with production bases in the United States are expected to be among the primary customers. The Japanese government said the project is part of its broader effort to strengthen semiconductor supply chains with the US.

According to the Yomiuri Shimbun and NHK, US chipmaker GlobalFoundries plans to build two semiconductor factories in Malta, New York, in partnership with Japanese companies. The facilities are expected to produce logic chips for use in automobiles and telecommunications equipment, to be supplied to Japanese automakers operating in the United States.

Unlike memory chips, which store data, logic chips are system semiconductors that handle information-processing functions such as computation, decision-making and control. The factories are expected to focus primarily on mature-process chips — a more technically stable category than cutting-edge advanced nodes. Mature-process chips generally refer to those made using 28-nanometer or larger processes and are widely used in automobiles, industrial machinery and telecommunications equipment.

Japan's Ministry of Foreign Affairs said in a statement Thursday that the project aims "to build a resilient supply chain in the semiconductor sector, which is strategically important from an economic security perspective." It added that the initiative would expand production capacity for mature-process chips used in automobiles, industrial machinery, smartphones and AI data centers.

The project is part of Japan's agreed investment and financial support package for the United States, valued at up to $550 billion. Donald Trump announced Wednesday (local time) on Truth Social that he had unveiled "$21 billion in investment to build two massive new semiconductor manufacturing facilities in Malta, New York," adding that "Japan will be funding the investment under my leadership."

The funding is expected to come through loans from the Japan Bank for International Cooperation and other major Japanese financial institutions. The first of the two factories is set to break ground this year, with production targeted to begin in 2029. The timeline for investment in the second factory has yet to be determined.

Tokyo Electron, a Japanese semiconductor equipment maker, and chipmaker Renesas Electronics are also expected to participate in the project. Tokyo Electron will supply manufacturing equipment, while Renesas will receive chips produced at the facilities. Renesas had earlier announced in February a plan to jointly manufacture next-generation automotive semiconductors with GlobalFoundries.

The Japanese government's decision to frame the project as a supply chain initiative reflects the fact that stable procurement of automotive and industrial chips is directly tied to economic security. With semiconductor production concentrated in parts of Asia, expanding manufacturing capacity within the United States would reduce the risk of supply disruptions caused by geopolitical tensions or natural disasters.

Trump said the project would create more than 27,000 construction and supply chain jobs and over 1,000 semiconductor manufacturing jobs in New York state. He also said the initiative simultaneously expands domestic chip production capacity and translates Japan's investment pledges into actual manufacturing facilities on US soil.

Excluding this semiconductor project, six other initiatives have been announced under Japan's agreed investment and financial support package with the United States, including the construction of next-generation nuclear reactors and natural gas power plants. The previously announced commitments total $109 billion, roughly 20 percent of the overall $550 billion plan. The Yomiuri Shimbun reported that the US side has proposed additional projects and that the two governments are continuing to review them toward an agreement.

Meanwhile, Trump also announced that South Korea had committed $50 billion to invest in Alaska's LNG development project, and that Taiwan had pledged to purchase between $70 billion and $80 billion worth of Alaskan LNG.