GlobalFoundries (GFS.US) and TSMC (TSM.US) reach a $2 billions silicon interposer supply agreement

According to the Zhihui Finance APP, GlobalFoundries (GFS.US) announced on Thursday that it has reached a five-year agreement valued at $2 billion to provide domestic U.S. capacity to TSMC (TSM.US). After the news was released, GlobalFoundries' share price surged as much as 7% during intraday trading. Under the agreement announced on Thursday, GlobalFoundries will help supply components known as "silicon interposers." The American chip manufacturer will rely on its factory in Malta, New York, for production, and stated that it retains the option to expand capacity as customer demand grows.

Silicon interposers are thin layers of silicon that sit between a chip and its packaging, carrying the wiring needed to deliver electronic signals and power so that chips can function properly. As semiconductor sizes increase and companies integrate multiple chips into single packages, such components are becoming increasingly important.

The agreement provides TSMC with an additional source of domestic U.S. capacity. Currently, TSMC is working to expand its presence in the United States. TSMC is the world's leading chip foundry, manufacturing semiconductors for external clients such as NVIDIA, Apple, and AMD.

GlobalFoundries' stock price soared as high as $51.45 during intraday trading, marking the largest single-day gain in three weeks. As of Wednesday's close, the stock had risen 38% so far this year.

GlobalFoundries' foundry business typically focuses on lower-tech chips, referred to as "fundamental semiconductors." As the market's interest in packaging technologies like silicon interposers grows, the company is also beginning to play an important role in more advanced AI components.

Ed Kaste, Senior Vice President of GlobalFoundries, stated in a release: "Advanced packaging is becoming increasingly critical to enable the performance, energy efficiency, and scale needed for the next generation of AI systems."

The company expects to begin gradually ramping up high-volume production capacity for TSMC components in the first half of 2028.