Economy Minister Bruno Le Maire announced on Monday the amount of state aid that will be granted to STMicroelectronics and GlobalFoundries' new semiconductor plant in Crolles, near Grenoble, a project worth almost 7.5 billion euros. This new site is "the largest industrial investment in recent decades, excluding nuclear", according to the expression of Bruno Le Maire in July 2022. The key is the creation of 1000 jobs.
On Monday, the minister must sign with the leaders of the Franco-Italian STMicroelectronics, Jean-Marc Chéry, and GlobalFoundries, Thomas Caulfield, the contracts relating to the state aid that was authorized at the end of April by the European Commission, said the Ministry of Economy on Friday. The investment amount was initially €5.7 billion when the project was announced in July 2022. Neither Bercy nor STMicroelectronics, interviewed by AFP, wished to explain the difference.
This future plant is part of the "Chips Act", the European Union's programme for the EU to reach 20% of the global semiconductor market by 2030, which means quadrupling current European production. The plan, which was agreed between EU member states and the European Parliament on 18 April, relaxes rules on public subsidies to the sector.
The European Chips Act provides for a total of €43 billion of public and private investment in semiconductor production. The EU's goal is to regain a place alongside Asia and America in global semiconductor production.
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6% more production capacity in the EU
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The project will add almost 6% of new production capacity to existing European capacity," the Economy Ministry said. "The objective (is) to increase French production capacity by 620,000 semiconductor plates per year by 2028," he added.
Europe has seen its market share fall in recent decades to less than 10% of global production, while its dependence on Asian producers that dominate the world market has worsened: Taiwan (where 90% of the world's most advanced chips are produced), South Korea, and increasingly China. However, the Covid-19 pandemic, by paralyzing supply chains in Asia, has led to significant chip shortages to the point of putting the European automotive industry in difficulty – an electroshock 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 assume 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 capacity, to serve sovereign needs, national security, or specific needs of VSEs and SMEs", according to Bercy.
