Japan and the US are discussing a GlobalFoundries chip plant under their $550bn pact, Nikkei reports

According to a report by Nikkei Asia on Thursday, Japan and the United States are negotiating to set up a semiconductor factory as part of their $550bn investment agreement.

The project would be worth between ¥2trn and ¥3trn ($12.9bn and $19.3bn) and will be run by the US chipmaker GlobalFoundries, which makes logic chips.

Nikkei didn’t provide any sources, and the report did not include the plant’s address. Neither government has made any public comment.

The $550 billion commitment was Tokyo’s part of the trade agreement under which US tariffs on the majority of Japanese products were limited to 15 percent; the Japanese authorities select and declare the projects that it finances, and the first two installments, amounting to $109 billion, were allocated to oil, gas, minerals, nuclear power and gas-fired power stations.

The money in question has not yet been spent on chips or AI; last month Japan’s trade minister stated that these two technologies would have “very significant weight” in the next set of projects.

The first chip project under the agreement would be a plant operated by GlobalFoundries. The company produces mature and specialty logic chips for use in cars, phones, and industrial equipment, not the cutting-edge processors employed to train AI models.