European chip maker ST Microelectronics is reported to be in talks with  Globalfoundries on building a joint wafer fab in France.

The two companies want to take advantage of the subsidy opportunities afforded by the European Chips Act, according to Bloomberg quoting an unnamed source.

The European Commission has proposed the €43 billion European Chips Act as a mechanism to help Europe increase domestic IC manufacturing and produce 20 percent of the world’s chips by 2030. ST already has a joint development deal with Tower Semiconductor at the 300mm wafer fab it is building in Agrate, Italy, but Tower is being taken over by Intel. GlobalFoundries also has a fab in Dresden, Germany.

The political awareness of the strategic significance of chip production has increased since a chip supply shortage closed or limited production at many European companies, particularly in automotive sector. Intel has been persuaded to put two wafer fabs in Magdeburg, Germany at a cost of about €17bn and is set to receive a 40 percent subsidy.

Intel’s wafer fabs will manufacture advanced chips at around the 2nm node but are not due to start production until 2027. Intel is also planning to put down an R&D and chip design centre in France

French connection

France is eager to also see its chip manufacturing footprint expand and may be pushing ST to participate and help create what would be a second wafer fab under the European Chips Act initiative. ST has a major 300mm wafer fab Crolles that was developed 20 years ago under the Crolles 2 Alliance. This comprised ST, Philips (later NXP Semiconductor) and Motorola Semi (subsequently Freescale and then acquired by NXP Semiconductor).

The construction of another shell on or near to the Crolles campus and near the CEA-Leti research institute in Grenoble might fulfil the brief for French politicians, ST and Globalfoundries.

No details have been provided around how much could be spent on the wafer fab, where it would be located or what it would make. It is notable that STMicroelectronics and Globalfoundries share a common fully-depleted silicon-on-insulator (FDSOI) technology. This is being used for a number of types of IC just behind the leading edge at 22nm and there is a EUropean roadmpa to take this technology to 10nm.

There may be political pressure to double-down on the FDSOI technology as something that provides European differentiation.

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