US President Trump Announces Japan to Provide $21 Billion Capital for US Investment
US President Trump announced on Truth Social that Japan will provide $21 billion in capital for the construction of two semiconductor manufacturing plants in New York State. The project will be operated by GlobalFoundries, and the plants will be jointly owned by the US government and Japanese stakeholders.
Trump stated that the project is expected to create approximately 27,000 construction and supply chain-related jobs, as well as over 1,000 high-skilled manufacturing positions. The first plant is planned to invest about $10 billion, aiming to start production in 2029, while the second plant will also invest about $10 billion. Each plant will have an annual capacity of 900,000 300mm wafers, totaling 1.8 million wafers.
This investment is part of the previously agreed $550 billion US investment framework between the US and Japan. As a result, the US will reduce tariffs on Japanese automobiles and other goods from at least 25% to 15%. According to the arrangement, Trump selected the projects funded by Japan, with the free cash flow generated from the investment being split equally between the two countries until a certain amount is reached, after which 90% will go to the US.
The US government will also acquire about 4% equity in GlobalFoundries, raising its stake in the company to approximately 7%. GlobalFoundries has previously received $163 million in funding from the US government and will redirect $95.5 million in CHIPS Act subsidies towards silicon photonics, silicon germanium, and advanced packaging fields. The company's major shareholder is the Abu Dhabi sovereign fund Mubadala, which will charge fees for construction, operation, and technology licensing.
Initial customers include Japan's Renesas Electronics and Apple. GlobalFoundries CEO Tim Breen stated that some of the Japanese capital will flow to Japanese equipment suppliers such as Tokyo Electron. The company's stock price rose over 4% following the announcement, with a cumulative increase of over 33% for the year. Japan has announced two batches of US projects totaling over $100 billion.
Japan provides all investment capital, while the US gains revenue rights through equity and cash flow distribution. Funds flow from Japan to US semiconductor capacity construction, with GlobalFoundries receiving operational fees and technology licensing income, while Japanese equipment suppliers receive orders. The protected US manufacturing segment benefits, and the import-dependent supply chain and Japanese automobile exporters experience relative relief following tariff reductions.
Source: Public Information
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Trump reached a $550 billion investment commitment with Japan in 2025 in exchange for tariff reductions. This $21 billion project is a concrete implementation under that framework, with Trump directly designating the use of funds. GlobalFoundries has previously received US government funding and minor equity, and this further expands the government's stake, continuing its path of converting subsidies into equity.
All Japanese capital is directed into the construction of wafer fabs in New York State, while the US gains ownership shares and future cash flows through special purpose vehicles and equity arrangements. The motivation is to exchange tariff negotiations for direct Japanese investment in US semiconductor capacity while strengthening the domestic supply chain. Resource mobilization is reflected in the Japanese government's leading role in capital outflow, with GlobalFoundries responsible for operations and customer connections, and equipment orders partially returning to Japanese companies.
Similar arrangements can be seen in the US support for TSMC's Arizona plant and Intel's government equity transactions. The current semiconductor industry is in a phase of capacity expansion alongside deep government involvement, with the US advancing domestic manufacturing and national capital participation through foreign investment and equity holdings.
Essentially, this is a concentration of capital. Japanese funds are concentrated into specific semiconductor projects in the US, while the US government concentrates on obtaining long-term revenue rights through equity and cash flow distribution mechanisms. The mechanism is to use tariff reductions as a bargaining chip to lock foreign capital into strategically selected domestic industries and achieve capital control concentration towards policymakers through ownership structures.
ABAB News · Cognitive Law
Tariffs are negotiation chips, investment is the result of fulfillment
Foreign capital pays, the domestic side gains equity and cash flow
Capacity expansion relies on external capital, control remains internal