STOCKHOLM/PARIS — The latest step to increase output in the area was announced on Monday by chipmakers STMicroelectronics and GlobalFoundries. The factory will be built in France with government funding.
The news comes as President Emmanuel Macron gets ready to reveal $6.8 billion in investments from significant international corporations at this week’s Choose France summit.
In an effort to reduce their reliance on Asian suppliers and alleviate the global chip shortage that is causing havoc for automakers, the United States and the European Union have been pushing for domestic chip factories and have offered billions in state subsidies in exchange.
The facility, which will be located next to STM’s current plant in Crolles, is anticipated to operate at full capacity by 2026, producing up to 620,000 wafers annually with an 18-nanometer thickness.
These are utilized in mobile, IoT, and automotive applications.
The companies withheld information about the amount of investment at the new location close to the Swiss and Italian borders as well as the amount of funding the French government would contribute.
According to someone with knowledge of the situation, the total investment would be around $5.7 billion.
Without mentioning the currency in question, Macron’s office stated that the French President would visit the factory site and that the investment totaled more than 5.7 billion.
STMicro and GlobalFoundries spokespeople declined to comment.
Around 1,000 new jobs would be generated by the new factory, which would also aid STMicro in achieving its goal of increasing revenue to more than $20 billion.
According to STMicroelectronics CEO Jean-Marc Chery, “We will have more capacity to support our European and global customers as they transition to digitalization and decarbonization.”
As part of the European Chips Act, the European Commission relaxed funding regulations for cutting-edge semiconductor plants earlier this year. The goal of the EU is to double its global market share to 20% by 2030.
Intel announced plans for a $88 billion investment in Europe in March and chose Germany as the location for a sizable new chip manufacturing complex. It intends to erect its new European research hub in France, resulting in the creation of 1,000 new high-tech jobs.
The most recent 2-nanometer chips, which are more recent than the STM-GlobalFoundries project, will be produced at Intel’s facility.
Since the end of 2020, there has been a huge demand for chips as a result of higher orders from electronics manufacturers, fueled by work-from-home policies, which have resulted in a surge in gadget sales and supply shortages for other sectors like the auto and telecom suppliers.
However, according to Gartner and other research companies, the demand for chips in other sectors will increase as PC and smartphone sales decline later this year. ($1 = 0.9862 euros)