GlobalFoundries, STMicro Snag €7.4B In EU Money For French Fab Project

GlobalFoundries and STMicroelectronics will receive billions of euros in European funding to build a chip factory in Crolles, France.

In a statement Friday, the European Commission announced that the American and Dutch multinationals' joint fab project had received the greenlight. Funding will take the form of direct grants paid to both parties totaling roughly €7.4 billion ($8.2 billion, £6.6 billion) to help pay for the plant.

"The measure will have wide positive effects for the European semiconductor ecosystem and contribute to strengthening Europe's security of supply," an EC statement reads.

The foundry project, announced last July, will see the two companies construct a fab alongside ST's existing facilities in Crolles. When fully operational in 2027 — a year later than initially planned — the site is expected to employ 1,000 workers and produce around 620,000 300mm wafers a year, with GlobalFoundries claiming 58 percent of that capacity and ST taking the remainder.

However, unlike many of the fabs popping up around the US and Europe, the joint project won't produce leading edge parts. Instead, the companies are targeting commodity chips using fully-depleted silicon on insulator (FD-SOI) technology. As we reported at the time, the chip-making technique makes for relatively speedy and power-efficient parts that make them ideal for automotive, industrial, and IoT applications, where bleeding-edge process tech is neither required nor cost effective.

ST in particular has its eye on capturing a larger share of the electric vehicle market. In addition to FD-SOI parts the company is also investing heavily in silicon-carbide-based power transistors. These components are favored by the automotive industry for their ability to improve the range of EVs.

However, the European Commission statement also highlights the use of FD-SOI parts in telecommunications, security, defense, and aerospace applications — many of which GlobalFoundries has existing business interests.

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In exchange for these funds, GF and ST have made several concessions. These include manufacturing EU priority orders in the case of future supply shortages, continued investment in next-gen FD-SOI tech, and making capacity available to small-to-medium-sized businesses and third-parties to test and develop new products. Finally, both companies have agreed to share any profits in excess of current expectations with the French government.

The funding approval comes just over a week after the €43 billion European Chips Act was finalized. The massive funding measure seeks to simultaneously reduce the region's reliance on foreign chipmakers while doubling the region's market share in semiconductor development, manufacturing, and material supply chains from roughly 10 percent today to 20 percent by the end of the decade. ®