The $21 billion figure is a cap, not a commitment. The second fab's funding is conditional, so the firm committed amount is closer to $10 billion for now. Japan has announced two batches of projects worth more than $100 billion combined under the scheme so far. The exact allocation of fab capacity among customers has not been set and will be settled after the announcement, according to CEO Tim Breen.
The deal falls under a $550 billion Japan-to-U.S. investment pledge tied to a 2025 trade agreement that lowered U.S. tariffs on Japanese cars and other imports from at least 25% to 15%. Under that arrangement, the U.S. selects which projects Japan funds. Free cash flows are split evenly until a set allocation is reached, after which the U.S. receives 90%. Attorneys tracking the deal should watch the conditions attached to the second fab, the terms of the government equity stake, and how the cash-flow split is applied once returns begin. GlobalFoundries, which is majority-owned by Abu Dhabi's Mubadala Investment, says it will prioritize U.S. and Japanese customers. Renesas Electronics and Apple are named as early customers, and Breen expects some Japanese money to flow to toolmakers such as Tokyo Electron. Commerce Secretary Howard Lutnick called the plan another large manufacturing investment from the trade deal.