Geneva-based chip manufacturer STMicroelectronics and American chip manufacturing and design company GlobalFoundries signed a memorandum of understanding to establish a semiconductor manufacturing facility in southeastern France, according to a joint statement on July 11.

“With today’s announcement, we are expanding GlobalFoundries’s presence within Europe’s dynamic technology ecosystem,” Thomas Caulfield, CEO of GlobalFoundry, said in the joint statement. 

According to fDi Markets, the EU attracted $25.4bn of chips investment with 26 projects in 2021, experiencing a huge jump from $41.3m in the previous year. The EU is keeping a strong uptrend with $14bn this year (to May).   

The new facility will be located adjacent to STMicrolectronics’s existing chip plant in Crolles, France. The companies expect to ramp up at full capacity by 2026, producing up to 620,000 300mm wafers per year, which represents up to 42% and 58% of annual production of STMicroelectronics and GlobalFoundries respectively. They expect to add 1000 more staff for the new facility.

The new plant will manufacture chips as small as 18 nanometres to match high demands for automotive, information technology and mobile applications. 

The French presidency said that the joint investment would be worth more than €5.7bn, according to a statement published on July 11. GlobalFoundries confirmed to fDi that the project entails a “multibillion” euro investment. STMicroelectronics did not respond to a request for a comment.

STMicroelectronics and GlobalFoundries will receive “significant financial support” from the French government for the new facility which will contribute to “the objectives of the European Chips Act,” according to the statement. 

The European Chips Act was proposed in February 2022 by the European Commission. It aims to bolster the bloc’s chip industry through mobilising €43bn of investment and establishing a resilient supply chain for semiconductors. The EU sets the goal of reaching 20% of global semiconductor production by 2030, which stands at about 9% today. The proposed regulation will be discussed further by the European Parliament and Council.  

“[STMicroelectronics] is transforming its manufacturing base. We already have a unique position in our 300mm wafer fab in Crolles, France ... We continue to invest into our new 300mm wafer fab in Agrate, Italy, ramping up in 2023 with an expected full saturation by end 2025,” Jean-Marc Chery, president and CEO of STMicroelectronics, said in the joint statement on July 11.

Including STMicroelectronics and GlobalFoundries new chip plant, the Élysée Palace announced 14 foreign investment projects totalling €6.7bn to create 4000 additional jobs.