# Japan METI backs $10 billion US chip project with toolmakers *Tokyo Electron and Screen Holdings join a New York mature-node fab slated to break ground by late 2026 under the bilateral Strategic Investment Initiative.* **Published:** October 29, 2026 **By:** Kenji Sato **Section:** Semiconductors & AI Hardware — Japan **Format:** Breaking **Confidence:** high **Source:** https://eastasiabrief.com/semiconductors/japan-meti-backs-10-billion-us-chip-project-toolmakers-989 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - METI confirmed a $10 billion New York fab project under the Japan-U.S. Strategic Investment Initiative - Tokyo Electron, SCREEN Holdings and Tokyo Ohka Kogyo secure supply roles while Renesas agrees to off-take wafers - Fab construction begins by Dec. 31, 2026, while commercial fab launch on Oct. 27 remains unconfirmed ![Engineers inspect equipment inside a cleanroom facility as part of the joint Japan-U.S. semiconductor manufacturing initiative. (AI-generated image)](https://eastasiabrief.com/media/2026-10-28-6a67a5c4270f.webp) *Engineers inspect equipment inside a cleanroom facility as part of the joint Japan-U.S. semiconductor manufacturing initiative. (AI-generated image)* Japan's Ministry of Economy, Trade and Industry reviewed implementation milestones on Oct. 27, 2026, for a $10 billion joint semiconductor manufacturing project agreed with the United States in New York. The project represents the first semiconductor venture authorized under the Japan-U.S. Strategic Investment Initiative. Both governments established the framework in a bilateral memorandum of understanding signed in September 2025. The initial budget of approximately $10 billion (about 1.6 trillion yen) represents roughly 2% of the $550 billion investment target set under the broader bilateral initiative. Planned facility expansions could raise total capital spending to $21 billion. The bilateral initiative aims to expand mature-node semiconductor capacity to protect critical supply chains. Automotive plants, industrial machinery builders and artificial intelligence data centers rely heavily on these legacy chips. The Ministry of Economy, Trade and Industry, which administers Japan's export programs and industrial policy, confirmed the project site in New York State. GlobalFoundries operates primary foundry facilities in the state. Japanese equipment and materials suppliers anchor the supply network for the planned fab. Tokyo Electron Ltd. and SCREEN Holdings Co., Ltd. confirmed interest in providing wafer processing and cleaning machinery. Tokyo Ohka Kogyo Co., Ltd., which supplies high-purity photoresists to global chipmakers, agreed to deliver specialty materials and chemical components. Automotive semiconductor designer Renesas Electronics Corporation agreed to purchase finished wafers produced at the site. Japanese component makers Fujikin Incorporated and Kusakawa Seiki Co. are preparing to supply specialized piping and precision fittings for the facility. The arrangement embeds Japanese domestic suppliers into an American manufacturing site backed by bilateral trade financing. Trade officials held an online Consultation Committee session on Oct. 20, 2026, to coordinate site preparations. Representatives from Japan's Ministry of Finance, Ministry of Foreign Affairs, Nippon Export and Investment Insurance and the U.S. Department of Commerce attended the meeting. The Ministry of Economy, Trade and Industry has allocated approximately 100 billion yen ($625 million) to Nippon Export and Investment Insurance to provide trade insurance and debt guarantees for initiative projects. Commercial foundries face structural margin pressures when building capacity outside their domestic bases. The bilateral guarantee mechanism reduces capital expenditure risks for participating equipment makers. The initiative addresses legacy logic bottlenecks exposed during recent supply disruptions. Japanese automakers lost significant production volume between 2021 and 2023 because basic microcontroller supplies failed. The New York project operates alongside Japan's domestic advanced packaging efforts. State-backed foundry venture Rapidus Corporation opened its Rapidus Chiplet Solutions packaging research center in Chitose, Hokkaido, on April 11, 2026. Rapidus established the 9,000-square-meter packaging cleanroom inside a Seiko Epson Corporation facility adjacent to its IIM-1 foundry. The packaging center operates pilot lines for flip-chip ball grid array, silicon interposers and hybrid bonding. Rapidus is testing 600-millimeter square panel-level packaging to mount multiple chiplets on redistribution layer panels. The company announced an engineering center partnership with Indian technology services provider HCLTech on Oct. 26, 2026. Domestic packaging investments run in parallel with overseas foundry projects. Tokyo Electron supplies deposition and track systems to both the Rapidus Hokkaido site and the upcoming New York venture. SCREEN Holdings holds roughly 70% of the global market for single-wafer cleaning equipment. Its inclusion secures critical wet-cleaning tool orders for the planned American production lines. Tokyo Ohka Kogyo commands more than 20% of the global market for advanced photoresists. The New York fab agreement provides the chemical maker with a dedicated North American customer pipeline. Renesas Electronics generates roughly half its revenue from automotive semiconductors. Securing localized wafer supply in North America shields the company from trans-Pacific shipping interruptions. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics continue to dominate leading-edge contract manufacturing. The Japan-U.S. initiative concentrates capital on mature trailing nodes where industrial supply shortfalls cause outsized factory stoppages. Chinese foundries have expanded trailing-node capacity aggressively, capturing global market share in 28-nanometer and 40-nanometer logic. The New York facility establishes an allied production node that operates outside Chinese procurement networks. Construction on the New York mature-node fab is scheduled to begin before Dec. 31, 2026, according to the ministry notice. Rapidus plans to begin commercial mass production of 2-nanometer logic in Hokkaido during the second half of fiscal year 2027. The ministry has not published confirmation that commercial manufacturing or advanced packaging lines began operating on Oct. 27, 2026. The formal record shows the New York project remains in site-preparation stages ahead of late-2026 groundbreaking. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Japan-U.S. Strategic Investment Initiative fab project | Samsung and DB HiTek face non-China trailing-node capacity expansion in US | SMIC loses potential mature-node auto chip export share to subsidized US-Japan fab | Tokyo Electron and SCREEN secure tool orders for $10B NY fab and Rapidus RCS site | Automotive supply chains gain localized mature logic supply shielded from Pacific transit risks | | Japan-U.S. Strategic Investment Initiative fab project | Samsung and DB HiTek face non-China trailing-node capacity expansion in US | SMIC loses potential mature-node auto chip export share to subsidized US-Japan fab | Tokyo Electron and SCREEN secure tool orders for | | | Japan-U.S. Strategic Investment Initiative fab project | Samsung and DB HiTek face non-China trailing-node capacity expansion in US | SMIC loses potential mature-node auto chip export share to subsidized US-Japan fab | Tokyo Electron and SCREEN secure tool orders for $10B NY fab and Rapidus RCS site | Automotive supply chains gain localized mature logic supply shielded from Pacific transit risks | ## In this story - **Companies:** Tokyo Electron, SCREEN Holdings, Tokyo Ohka Kogyo, Renesas Electronics, GlobalFoundries - **Tickers:** 8035.T, 7735.T, 4186.T, 6723.T, GFS - **Exposed:** Rapidus, Seiko Epson, Fujikin, HCLTech - **Policy:** Subsidies, Local Content Rules - **Impact:** Capex, Supply Chain, Order Book ## Primary sources 1. meti.go.jp 2. mofa.go.jp 3. rapidus.inc --- Cite as: East Asia Brief, "Japan METI backs $10 billion US chip project with toolmakers," October 29, 2026. https://eastasiabrief.com/semiconductors/japan-meti-backs-10-billion-us-chip-project-toolmakers-989