(Update: details concerning the agreement concluded between STMicroelectronics and GlobalFoundries, comment from an analyst, statement by Bruno Le Maire, the French Minister of the Economy, context and new share price of STMicroelectronics)
PARIS (Agefi-Dow Jones)–Semiconductor manufacturers STMicroelectronics and GlobalFoundries announced on Monday the signing of a memorandum of understanding to build a new production unit for a wide range of technologies in France. . This announcement comes on the occasion of the holding at the Palace of Versailles of the 5th “Choose France” summit, dedicated to the attractiveness of the country.
“This major investment over several years aims not only to produce semiconductors in advanced technologies in Europe, but also to support the leadership and resilience of European technological ecosystems, from R&D to high-volume production”, said the two companies said in a statement. Thus, STMicroelectronics and its American partner GlobalFoundries intend to meet customer demand “with additional capabilities in complex and advanced technologies to serve key end markets, such as automotive, industrial, IoT and infrastructure. communication”.
The new production unit of these two semiconductor giants will be adjacent to the existing 300mm wafer manufacturing plant owned by STMicroelectronics in Crolles, Isère. This new unit should reach its full capacity by 2026 to produce up to 620,000 300 mm wafers per year, 42% of which on behalf of STMicroelectronics. It will contribute significantly to the objectives of the European “Chips Act” plan, one of the aims of which is to increase Europe’s production capacity to 20% of world capacity by 2030.
“This project will more than double the production capacity in France in the technologies that will be at the heart of the needs of our industries by 2030 and beyond and will very significantly contribute to strengthening French and European industrial resilience in terms of ‘supply of components’, added the French government in a separate press release.
An investment of 5.7 billion euros
“The ‘mega-fab’ project led by STMicroelectronics and GlobalFoundries in Crolles in Isère represents more than 5.7 billion euros of investment,” added the government. “This is the biggest industrial investment in recent decades outside of nuclear power and a big step for our industrial sovereignty: it’s 1,000 jobs at stake”, commented Bruno Le Maire, the Minister of the Economy, on Twitter.
In their press release, STMicroelectronics and GlobalFoundries only indicated that this investment concerned “several billion euros”. During a conference with journalists, Jean-Marc Chéry, Chairman of the Management Board and CEO of STMicroelectronics, and Thomas Caulfield, CEO of GlobalFoundries, explained that this project benefits from “significant financial support from the French State”.
Moreover, Emmanuel Macron, the President of the Republic, will visit the STMicroelectronics site in Crolles on Tuesday, in order to present the microelectronics strategy of France 2030, but also to meet Jean-Marc Chéry and Thomas Caulfield.
“Some investors might bemoan a significant investment announcement at the top of the cycle, but they should look beyond the cycle to appreciate such decisions intended to support long-term growth,” Citi observes. For the financial intermediary, the construction of this new production unit bears witness to the ambitions of STMicroelectronics, particularly in the automotive and industrial sectors. Citi thus renews its recommendation to “buy” on the action of the Franco-Italian manufacturer of semiconductors, as well as its target price of 53 euros.
On the Paris Bourse, the STMicroelectronics share resisted the fall in the markets, climbing 0.9% around 12:15 p.m. Monday, to 31.10 euros, while the CAC 40 index lost 0.6%.
-Dimitri Delmond, Agefi-Dow Jones; 01 41 27 41 37; [email protected] ed: LBO – ECH
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July 11, 2022 06:19 ET (10:19 GMT)