STMicroelectronics will build a chip factory in Italy for 5

STMicroelectronics will build a chip factory in Italy for 5 billion euros

So far, activity in building semiconductor factories in Europe that could be eligible for subsidies under the country’s “chip law” has mainly been shown by companies from other parts of the world, such as Intel and TSMC. The Italian-French company STMicroelectronics wants to build a silicon carbide chip manufacturing plant in Italy and hopes to cover up to 40% of the costs through government subsidies.

    Image source: STMicroelectronics

Image source: STMicroelectronics

This was reported by the French publication L’Usine Nouvelle, citing its own sources, although the company itself declined to comment on such rumors. The €5 billion company is expected to be based in Catania, Italy, on the island of Sicily. It will specialize in the production of silicon carbide chips. These are becoming increasingly popular due to the development of the electric vehicle and alternative energy market as they are suitable for operation with high thermal and electrical loads.

STMicroelectronics provides jobs for 12,000 employees in Italy and France and will request up to 2 billion euros in subsidies from the Italian authorities for the implementation of this project, since the company must be built on the territory of this European country. Last month, the European “chip law” came into force, which provides for subsidies for the development of companies in the semiconductor industry in the European Union.

There is already an STMicroelectronics factory in Catania for the production of silicon carbide components; the second source is Singapore. In addition, STMicroelectronics is already building a €730 million plant in Italy to produce substrates for silicon carbide chips, and local authorities are covering up to 40% of the core costs. By 2024, the company expects to cover up to 40% of its needs for these substrates itself, as it continues to rely on the American company Wolfspeed and the German company SiChrystal for the rest of its supplies.

STMicroelectronics was one of the first companies to supply silicon carbide components to meet the needs of the electric vehicle market. Today the company controls up to 37% of this segment and thus supplies Tesla. In second place is the German company Infineon Technologies, which still only claims 19% of the global market. However, the latter wants to capture up to a quarter of the market by 2030 and therefore plans to invest 7 billion euros in building a business in Malaysia. Hot on the heels of both is American provider Onsemi, which rose from 5% of the market in 2021 to 15% at the end of 2022.

To maintain a competitive edge, STMicroelectronics plans a double migration in the technology sector in 2024. First, it will begin moving from using 150mm silicon wafers to larger 200mm wafers. Secondly, it is switching from the use of single crystal silicon carbide to Soitec’s SmartSiC substrates, which not only improve productivity by 15-20%, but also reduce associated carbon emissions by 70%. The substrate manufacturing company in Catania, which is currently being set up, will operate under a license from Soitec.

STMicroelectronics management expects the company to earn up to $1.2 billion by the end of this year from supplying silicon carbide components, significantly higher than last year’s $700 million that this amount will grow to $3 billion in 2025 and surpass the $5 billion mark by the end of the decade. According to analysts, the silicon carbide power electronics market capacity will grow to $9 billion by 2028, compared to $2 billion last year. Around three quarters of this demand is generated by the electric vehicle segment.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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