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GlobalFoundries plans to build two new chip factories with up to $21 billion in funding support from the Japanese government. As part of the related agreement, the U.S. government will also acquire about a 4% stake in the company. Under the agreement announced on Wednesday, GlobalFoundries will operate two factories jointly owned by the United States and Japan at its existing campus in upstate New York. Construction funding will come from the $550 billion Japan had previously pledged to invest in the United States. The new factories will produce so-called "basic chips," semiconductors that are relatively less technologically complex but critical and widely used in areas such as automobiles, industrial equipment, and communications equipment. As electronic components are increasingly used in a wide range of products, demand for these chips continues to grow, and chipmakers are stepping up efforts to expand supply. The artificial intelligence boom has also intensified supply tightness, as the semiconductor industry devotes more resources to advanced chips such as Nvidia's AI accelerators. GlobalFoundries' agreement aims to increase U.S. production of basic chips and reduce reliance on East Asian suppliers in response to U.S. national security concerns.