STMicro, GlobalFoundries Plan New French Chip Factory

A new chip factory is to be constructed in France, by chipmakers STMicroelectronics and GlobalFoundries.

The new factory was announced on Monday, and will utilise French government funding (thought to be close to 6.7 billion euros or $6.8 billion), although the two firms did not disclose how much they will invest.

The move will welcome news for European authorities, who have been looking to encourage chip firms to build fabs in the bloc for a while now.

European chips act

In March 2021 the European Union under its 2030 Digital Compass plan announced it wanted to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade.

In September 2021, the EC plan was first announced by Ursula von der Leyen.

The proposal, known as the ‘European Chips Act’, is a way to bolster Europe’s self sufficiency in the semiconductor sector, by easing state aid rules, improving tools to anticipate shortages and crisis, and strengthen research capacity in the bloc.

In February, the EU officially unveiled the European Chips Act, with the bloc mentioning Taiwan as one of the “like-minded partners” Europe would like to work with.

STMicroelectronics (ST) and GlobalFoundries (GF) said the new 300mm manufacturing facility will be next to STM’s existing plant in Crolles (near the Italian and Swiss borders in France) and is targeted to reach full capacity by 2026, with up to 620,000 wafers per year of production at a size of 18-nanometers.

These will be typically used in automotive, internet-of-things and mobile applications.

French funding

ST and GF said they will receive significant financial support from the State of France for the new facility.

“This facility will strongly contribute to the objectives of the European Chips Act, including the goal of Europe reaching 20 percent of worldwide semiconductor production by 2030,” the two firms stated.

“In addition to the sizeable, multi-year investment in advanced semiconductor manufacturing in Europe, it will support the leadership and resilience of the European technology ecosystems, from R&D (with the recently announced co-operation on R&D among ST, GF, CEA-Leti and Soitec) to large-volume manufacturing, and support European and global customers with additional capacity in complex, advanced technologies for key end-markets including automotive, industrial, IoT, and communication infrastructure.”

The new chip factory is expected to generate additional employment at the ST Crolles site (with approximately 1,000 additional staff for the new manufacturing facility) and across its ecosystem of partners, suppliers and stakeholders.

“This new manufacturing facility will support our $20 billion+ revenue ambition. Working with GF will allow us to go faster, lower the risk thresholds, and reinforce the European FD-SOI ecosystem,” said Jean-Marc Chery, President and CEO of STMicroelectronics.

“We will have more capacity to support our European and global customers as they transition to digitalization and decarbonization” he added. “ST is transforming its manufacturing base. We already have a unique position in our 300mm wafer fab in Crolles, France which will be further strengthened by today’s announcement.”

“We continue to invest into our new 300mm wafer fab in Agrate (near Milan, Italy), ramping up in H1 2023 with an expected full saturation by end 2025, as well as in our vertically integrated silicon carbide and gallium nitride manufacturing,” Chery concluded.

Other European investments

There have been wins and losses for Europe’s chip ambitions.

In March, Intel announced plans for a $88 billion investment across Europe and selected Germany as the site for a huge new chipmaking complex.

In France, it plans to build its new European research hub, creating 1,000 new high-tech jobs.

Intel’s German chip factory will make the 2-nanometer chips, which are more modern than the STM-GlobalFoundries project.

Last month chip contracting giant Taiwan Semiconductor Manufacturing Co (TSMC) dashed European hopes of constructing a chip factory in the bloc, saying it had no concrete plans for factories in Europe.