Economy Minister Bruno Le Maire announced Monday the amount of state aid that will be granted to the new semiconductor factory of STMicroelectronics and GlobalFoundries in Crolles, near Grenoble, a project of almost 7.5 billion euros. This new site constitutes “the largest industrial investment in recent decades, excluding nuclear”, in the words of Bruno Le Maire in July 2022. At stake, the creation of 1000 jobs.
Monday, the minister must sign with the leaders of the Franco-Italian STMicroelectronics, Jean-Marc Chéry, and of GlobalFoundries, Thomas Caulfield, the contracts relating to the State aid which was authorized at the end of April by the European Commission, specified the Ministry of the Economy on Friday. The amount of the investment initially amounted to 5.7 billion euros when the project was announced in July 2022. Neither Bercy nor STMicroelectronics, questioned by AFP, wished to explain the difference.
This future factory is part of the “Chips Act”, the European Union’s program for the EU to reach 20% of the world’s semiconductor market by 2030, which means quadrupling current European production. The plan, which was agreed between EU member states and the European Parliament on April 18, eases rules on state subsidies to the sector.
The European “Chips Act” plans to mobilize a total of 43 billion euros of public and private investment in the production of semiconductors. The EU’s objective is to regain a place alongside Asia and America in the world production of semiconductors.
“The project will make it possible to add almost 6% of new production capacities to the existing European capacity”, underlined the Ministry of the Economy. “The objective (is) to increase French production capacity by 620,000 semiconductor wafers per year by 2028,” he added.
Europe has seen its market share fall in recent decades to less than 10% of world production, while its dependence on Asian producers who dominate the world market has grown: Taiwan (where 90% most advanced chips in the world), South Korea, and increasingly China. However, the Covid-19 pandemic, by paralyzing supply chains in Asia, has led to major shortages of chips to the point of putting the European automotive industry in difficulty – a shock for the continent.
The pandemic and geopolitical tensions around China have raised awareness of the need to produce these essential components in Europe, and convinced Brussels to adopt an interventionist industrial policy in a continent traditionally very open to global competition. “At the request of the State”, STMicroelectronics and GlobalFoundries “undertake to prioritize orders, “up to 5% of annual production capacities, to serve sovereign needs, national security, or specific needs for VSEs and to SMEs”, according to Bercy.
