STMicroelectronics and Global Foundries to build new chip plant in France

Chipmakers STMicroelectronics (STM) and GlobalFoundries (GF) have announced plans to build a jointly operated 300mm semiconductor wafer manufacturing facility in France.

According to a statement on STM’s website, STM and GF will receive “significant financial support” from the French government to fund the project. The announcement forms part of French president Emmanuel Macron’s efforts to attract more foreign investors to the country.

The new joint facility will be built nearby to STM’s existing plant in Crolles, southeastern France. The new plant is expected to be fully operational by 2026 and will produce 620,000 300mm wafers a year.

The chips manufactured at the new facility will use FD-SOI (Fully Depleted Silicon on Insulator) technology, allowing them to support a broad range of technologies, including automotive, industrial, IoT and communications infrastructure applications. GlobalFoundries will receive 58% of the output, with the remaining 42% going to STMicroelectronics.

In a statement announcing the joint venture, Jean-Marc Chery, CEO of STMicroelectronics said the new manufacturing facility will support the company’s $20 billion revenue ambitions.

“Working with GlobalFoundries will allow us to go faster, lower the risk thresholds, and reinforce the European FD-SOI ecosystem. We will have more capacity to support our European and global customers as they transition to digitalization and decarbonization,” he said.

The state of the microchip market

Since 2020, the global chip market has been facing a crisis, with suppliers no longer being able to keep up with the growing demand for semiconductors. During the pandemic, sales of digital devices soared at a time when factories were having to halt production due to lockdown orders, causing huge disruption across a number of industries.

Currently, around 75% of semiconductor manufacturing occurs in China and East Asia. However, given the level of disruption the industry has faced over the last two years, there is now a major push from Western nations to increase chip production.

In 2021, the European Union proposed The European Chips Act, aiming to bolster the  production of semiconductors and double Europe’s market share to 20% by 2030.

In the US, president Joe Biden has put forward legislation to help boost chip production in the US to help ease supply chain issues. Both Intel and Samsung have already announced they would be building new chipmaking plants, choosing sites in Ohio and Texas respectively.