Japan will invest as much as $21 billion in two semiconductor factories in New York state that will be jointly owned by the US government and Japanese interests and operated by GlobalFoundries, the company announced on Wednesday.

The project forms part of a broader agreement under which Japan committed to invest $550 billion in the United States. That arrangement was reached last year by President Donald Trump’s administration in exchange for the United States reducing tariffs on Japanese cars and other imports from at least 25 percent to 15 percent. Japan will supply all of the investment capital for the new factories while the United States takes an ownership stake in them.

GlobalFoundries, which is majority-owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, will receive fees for constructing and running the plants and for licensing its chip manufacturing technology to them. In a separate agreement, the US government will acquire a 4 percent stake in GlobalFoundries itself, raising its total ownership of the company to about 7 percent, according to GlobalFoundries CEO Tim Breen.

Breen said the company will manage customer relationships for the New York facilities. Initial customers include Japan’s Renesas Electronics and Apple. “We definitely would like to give priority to US and Japanese customers,” he stated. Japan has already announced two groups of projects under the overall investment scheme with a combined value exceeding $100 billion. Under the arrangement, the US president selects the projects that receive Japanese funding. Free cash flows from the investments will be shared equally between the two countries until a set allocation is met, after which 90 percent will go to the United States.

The initiative expands semiconductor production capacity in the United States through this cross-border partnership and supports manufacturing operations in New York state.