GlobalFoundries (GFS.US) and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) Reach $2 Billion Silicon Interposer Supply Agreement

GlobalFoundries (GFS.US) announced on Thursday that it has reached a five-year, $2 billion agreement to provide U.S.-based capacity to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US). Following the news, GlobalFoundries' shares rose as much as 7% intraday. Under the agreement announced on Thursday, GlobalFoundries will help supply components known as "silicon interposers." The U.S. chipmaker will rely on its Malta, New York fab for production and said it has the option to expand capacity as customer demand grows. A silicon interposer is a small layer of silicon that sits between a chip and its packaging, carrying the wiring needed to transmit electronic signals and power so the chip can function properly. These components are becoming increasingly important as semiconductors grow larger and companies integrate multiple chips into a single package. The agreement provides Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR with an additional source of U.S.-based capacity. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is currently working to expand its footprint in the United States. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is the world's leading chip foundry, meaning a company that manufactures semiconductors for external customers, with clients including NVIDIA Corporation, Apple Inc. and AMD. GlobalFoundries' shares surged as high as $51.45 intraday, marking their biggest single-day gain in three weeks. As of Wednesday's close, the stock had risen 38% year to date. GlobalFoundries' foundry business typically focuses on less advanced chips, which it calls "essential semiconductors." As market interest in packaging technologies such as silicon interposers grows, the company has also begun to play an important role in more advanced AI components. Ed Kaste, senior vice president at GlobalFoundries, said in a statement: "Advanced packaging is becoming increasingly critical to achieving the performance, energy efficiency and scale required for next-generation AI systems." The company expects to begin ramping up mass production capacity for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR components in the first half of 2028.