GlobalFoundries (GF) announced plans to build up to 2 semiconductor plants in Malta, New York, using U.S.-Japan investment funds. Japan will fully cover the construction costs, with construction of the first plant beginning this year and operations targeted for 2029.
Malta, New York, is positioned as a core U.S. site where GF, which took over IBM's and AMD's semiconductor businesses, has operated for many years. The latest plan is an announcement selecting the sites for new plants under the U.S.-Japan investment agreement. The cooperation between the United States and Japan will provide up to $21 billion in funding, fully financed by Japan.
Construction of the first plant will begin this year, with operations scheduled to start in 2029. Once completed, it is expected to have annual production capacity of approximately 900,000 wafers and create more than 1,000 highly skilled jobs in Malta. Approximately 27,000 construction-related jobs are also expected. The allocation of the remaining $10 billion will depend on a market-demand-based decision on whether to build the second plant, with a final decision scheduled by the end of 2028.
GF will operate the plants under an arrangement in which it provides dedicated plant operations and receives equipment operation fees over the long term. The initial consideration will be $50 million, and free cash flow of approximately $3 billion is expected to be generated over the next 10 years. Under the terms of the U.S.-Japan agreement, the United States and Japan will split the proceeds equally until the investment has been recovered, after which the U.S. side is expected to receive 90% of the earnings.