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STMicro, GlobalFoundries invest €5.7 billion in French semiconductor production

A new factory will boost the nation's economy, and further consolidate western wafer supply

France's President Emmanuel Macron wearing a hard hat bearing the letters ST, is flanked by French government officials while the words ST Microelectronics can be seen on a wall behind them

Semiconductor manufacturing specialists STMicroelectronics and GlobalFoundries have announced plans for a new chip factory in Crolles, southeastern France.

In a move that will greatly increase European chip manufacturing security and boost the French economy, the companies will develop the new plant next to the existing STM facility within the commune. Around 1,000 new jobs are expected to be created as a direct result of the investment, cementing the region as a cornerstone of French industry.

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Current targets for the facility have it reaching full capacity by 2026, at which point 620,000 wafers will be produced per year. The plant will manufacture 18-nanometre wafers, to be used in automotive, Internet of Things (IoT) and mobile contexts. 

The project has been announced amidst a worldwide semiconductor shortage, with western nations particularly keen to use funds to establish local manufacturing and reduce reliance on chip imports from Asia. Action in this area has been fuelled largely by macroeconomic uncertainty and security concerns around the long-term viability of the current supply chain.

Investment from the state totalling an as-yet-unspecified figure has been proposed to support the project, though French President Emmanuel Macron’s office has indicated it is in excess of €5.7 billion. Reuters reports that both companies indicated the French government was of great assistance to the project.

It is expected that this will be drawn from the total €6.7 billion of support from major companies such as Raytheon and FedEx announced at this month’s Choose France summit. In all, the money will support 14 investment projects and is expected to create 4,000 jobs in France.

The final amount of backing for the semiconductor factory is expected to be greater, however, after prospective funding from the European Commission’s €43 billion Chips Act is taken into account.

"We will have more capacity to support our European and global customers as they transition to digitalisation and decarbonisation," STMicroelectronics CEO Jean-Marc Chery stated, with the decision set to push STM's revenue above their $20 billion target. IT Pro approached STMicroelectronics and GlobalFoundries for further comment.

The Indian government is currently working to expand and dominate semiconductor manufacturing with billions of dollars of support, and the EU is moving ahead with its Chips Act to sate increasing demand and consolidate localised supply.

But while Intel plans $80 billion of investment in European facilities with significant help from the EU Chips Act, its pending plans for an ambitious facility in Ohio grow increasingly fraught as the CHIPS For America continues to flounder in the US Congress. Both chambers have thus far failed to come to an agreement over the precise details of the $52 billion package, which could cost the America the crown jewels of future wafer production.  

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