STMicroelectronics to build $728 mn chip plant in Italy

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STMicroelectronics to build $728 mn chip plant in Italy

STMicroelectronics ST said on Wednesday it would build a 730 million euro $728 million silicon carbide wafer plant in Italy, the latest investment by a major chipmaker to help deal with a semiconductor shortage that affects global manufacturing.

Supply chain bottlenecks going on for more than two years have caused havoc in several global industries, including automotive, healthcare and telecoms, due to demand for chips used in everything from smartphones to cars.

The new integrated silicon carbide SiC substrate manufacturing facility will meet increasing demand from automotive and industrial customers as a result of the transition to electrification, according to Franco-Italian ST.

The five-year investment, which is due to be completed in 2026, will be supported by 292.5 million euros of public funds from Italy, as part of the country's National Recovery and Resilience Plan, with the grant approved by the European Commission.

The Italian measure is expected to strengthen Europe's semiconductor supply chain, helping us deliver our green and digital transition, according to European Commission Executive Vice-President Margrethe Vestager in a separate statement.

She said that the industry will have a reliable source of innovative substrates for power efficient chips.

In order to boost production capacity in Europe, Brussels launched the so-called Chips Act earlier this year, which will allow 15 billion euro in additional public and private investment in the industry by 2030, on top of 30 billion euro of public investments already planned from NextGenerationEU, Horizon Europe and national budgets.

ST will build a new plant at its Catania site in Sicily, along with an existing SiC device manufacturing facility. The group said it will create around 700 additional jobs.

This new facility will be a key to our vertical integration in SiC as we ramp up volumes to support our automotive and industrial customers in their shift to electrification and higher efficiency, according to Jean-Marc Chery, ST CEO.

ST said that production is expected to start in 2023, with a balanced supply of SiC substrate between internal and merchant supply.

Rival chipmaker Intel is in talks with Rome to find a suitable area for the investment and will build a multibillion-euro chip factory in Italy.