GlobalFoundries Stock Climbs. What’s Behind the Chip Manufacturer’s Momentum.

GlobalFoundries is a contract chip manufacturer and has pledged to invest $16 billion in U.S. facilities. (Norbert Millauer/DDP/AFP via Getty Images)

Key Points

• GlobalFoundries shares rose 4.8% Friday on news of a potential U.S. plan to mandate domestic chip production.
• The Commerce Secretary discussed a plan requiring chip companies to match U.S. production with overseas imports.
• GlobalFoundries has committed $16 billion to U.S. manufacturing and could benefit from increased domestic orders.

GlobalFoundries shares were surging on Friday. The Trump administration’s latest plans to boost domestic chip manufacturing could be a boon for the stock.

Commerce Secretary Howard Lutnick has discussed a plan with semiconductor executives to potentially oblige chip companies to manufacture the same number of semiconductors in the U.S. as they import from overseas producers, The Wall Street Journal reported Friday, citing people familiar with the concept.

The Department of Commerce didn’t immediately respond to a request for comment early on Friday.

GlobalFoundries was up 4.8% in Friday trading. The manufacturer has already committed to a $16 billion investment in U.S. chip manufacturing and could be in line to receive more orders if the administration’s plan comes to fruition.

GlobalFoundries was formed through the divestiture of Advanced Micro Devices’ manufacturing arm in 2009. AMD subsequently became its first customer, while Qualcomm was another early partner. GlobalFoundries has supplied semiconductors for Apple products, specifically the iPhone, since 2010.

Other U.S. chip manufacturers were also gaining on Friday. Texas Instruments , which said in June that it would invest more than $60 billion in U.S. manufacturing sites, was up 1%. Memory-chip maker Micron Technology was up 0.5%.

Write to Adam Clark at adam.clark@barrons.com