France and Italy own 27.5 percent of the company and the subsidy could be allowed under the aegis of a European Commission instrument called IPCEI for Important project of common European interest.
ST had previously indicated it might upgrade a 200mm wafer fab at Crolles to run 300mm diameter wafers (see ST mulls capex expansion – and next 300mm wafer fab ) but has now indicated to French publication Usine Nouvelle that it could build another 300mm wafer fab at Agrate near Milan, Italy.
The cost is expected to be €1.5 billion each (about $1.8 billion each) but it is not clear how much the French and Italian governments would contribute. Under the IPCEI instrument the German government is helping to finance the consruction of a €1 billion wafer fab by Bosch and expansion of FDSOI chip production capacity at GlobalFoundries, both in Dresden.
Over the last decade ST pulled back from the manufacturing of leading-edge digital ICs. It has become fabless in this area and outsources the manufacturing of ICs to foundries such as Taiwan Semiconductor Manufacturing Co. Ltd. However, it has also announced a strategy of differentiated manufacturing of specialized circuits in areas such as sensors, MEMS, photonics, power management, mixed-signal and RF circuits. ST's manufacturing capabilities are now approaching full capacity.
"No decision has yet been taken by the board of directors," Usine Nouvelle , quoted Nicolas Dufourcq, chairman of the supervisory board of ST, as saying. In the face of saturated production these two projects could be launched by 2021, Usine Nouvelle , quoted DUfourcq as saying.
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