France Contributes 2.9bn Euros To New Chip Plant

France to contribute 2.9bn euros to planned STMicroelectronics and GlobalFoundries semiconductor plant planned in Crolles

France has said it will contribute 2.9 billion euros ($3.1bn, £2.5bn) in state aid to support a 7.5bn euro investment by STMicroelectronics and GlobalFoundries to build a semiconductor plant in Crolles, near Grenoble in southeastern France.

At a news conference at the French Finance Ministry held with the chiefs of the two firms, finance minister Bruno Le Maire called the investment “considerable and massive”.

The outlay is part of a 5.5bn euro package the French government has earmarked for the semiconductor sector by 2030, he said.

The announcement comes after the EU approved the French subsidy on 28 April.

jeremy waterhouse semiconductor chip
Image credit: Jeremy Waterhouse/Pexels

Automotive chips

The project, announced in July of last year, envisages a new site adjacent to an existing STM plant in Crolles.

The new factory is intended to reach full capacity by 2028, producing 620,000 wafers per year using a 18-nanometre process.

The process is used for chips destined for automotive, internet-of-things and mobile applications.

The factory is expected to create about 1,000 jobs, with France saying it looks to create 10,000 new roles in the chip sector by 2030.

Chip shortage

The EU and the US both have massive programmes put in place to encourage chip manufacturers to build new capacity on domestic soil, in theory lessening their dependence upon Asian supply chains.

The EU’s 43bn euro Chips Act and the $52bn Chips for America Act both received impetus following a worldwide semiconductor shortage that began during the Covid-19 pandemic and which caused disruption to automotive production in particular.