GlobalFoundries on Thursday said it has signed a $2 billion, five-year manufacturing agreement with TSMC to produce silicon interposers, a key component that links AI processors and memory chips inside advanced packages.

The silicon interposer sits beneath processors and memory chips and enables them to communicate at high speeds. Under the deal, GlobalFoundries will expand capacity at its Malta, New York, facility to make the components for TSMC’s CoWoS advanced packaging ecosystem. The site is expected to become the first US-based source of silicon interposers used in advanced chip-packaging technologies.

Volume production is expected to begin ramping in the first half of 2028. The agreement also provides a framework for future capacity expansion as demand for advanced packaging grows. Advanced packaging has become a major constraint on AI chip production, as demand exceeds available capacity.

Shares of GlobalFoundries rose about 6 percent in morning trading to around $51. Separately, TSMC reported third-quarter revenue of $46.71 billion, up 50 percent year on year, with September revenue of about $16.03 billion.