EC approves €7.4bn subsidy for ST-GloFo jv fab

When the jv was announced in July 2022, President Macron’s office said that the investment would be in excess of 5.7 billion without specifying the currency.

‘The aid will take the form of direct grants to ST and to GF’, says the EC statement.

The fab will be capable of running 620k 300mm wafers per year as from 2027.EC approves €7.4bn subsidy for ST-GloFo jv fabThe July 2022 announcement stated 2026 as the target date.

ST and GloFo agree to satisfy EU priority rated orders in the case of a supply shortage; to keep up FD-SOI development; to make capacity available to SMEs to test and develop their products; and to pay profits over and above expectations to France.

To justify the state aid under EU rules, the EC decided that:

Firstly, the fab is a ‘first-of-a-kind’ in Europe. ‘There is currently no mass-production facility in Europe for the planned technologies’ says the EC

Secondly the support for the fab has an ‘incentive effect’, says the EC, as ST and GloFo would not carry out this joint investment without public money.

Thirdly the measure ‘is necessary and appropriate to ensure the resilience of Europe’s Semiconductor supply chain’, says the EC.

Fourthly ‘the measure will have wide positive effects for the European semiconductor ecosystem and contributes to strengthening Europe’s security of supply’, says the EC.

A previous US-France chip jv between National Semiconductor, now part of TI, and the French company St Gobain, ended with the French government nationalising National’s share in return for  compensation of $1 – a French manoeuvre which rankles with National’s then CEO, Charlie Sporck, to this day.

But GloFo may have learnt from that. Whereas, St Gobain had a bigger share than National in their jv, in the GloFo-ST jv GloFo has a bigger share than ST

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