STMicroelectronics, GlobalFoundries Halt €7.5B Project

According to a report by EENews Europe, STMicroelectronics and GlobalFoundries have decided to suspend plans for a €7.5 billion joint investment to build a fully-depleted silicon-on-insulator (FDSOI) wafer fabrication facility in Crolles, France.

Back in July 2022, the two companies announced their intention to establish a joint venture in France. This was followed by the formal signing of a cooperation agreement in June 2023. Under the agreement, GlobalFoundries would hold a 58% stake as the primary investor, while STMicroelectronics would hold the remaining 42%. The planned total expenditure, including capital investments and auxiliary costs, was estimated at €7.5 billion. The facility was expected to be operational by 2026 and achieve full production capacity.

The project was set to benefit significantly from financial support provided by the French government, managed by Bpifrance. Approximately €2.9 billion—roughly 38.6% of the total cost—was committed as part of France’s "France 2030" plan, which aligns with the objectives of the European Chips Act and had received approval from the European Commission.

However, over 18 months after signing the cooperation agreement, there has been no substantial progress on the project. During this period, the European automotive and industrial chip markets have remained sluggish, with signs of inventory surplus.

Additionally, GlobalFoundries has prioritized its investments in the United States, while STMicroelectronics has pursued other strategic initiatives. For example, under its "China-for-China" strategy, STMicroelectronics has outsourced some MCU production to Chinese foundry Hua Hong Semiconductor. In June 2023, the company also announced a $3.2 billion investment to establish a new 8-inch silicon carbide device manufacturing facility in Chongqing, China, in partnership with a subsidiary of Sanan Optoelectronics.

In its recent financial report, STMicroelectronics projected a weak start to sales in 2025 and announced plans to optimize its operational scale. This initiative aims to save nearly $1 billion annually by 2027.

These market conditions and strategic realignments appear to be key factors behind the decision to put the Crolles joint venture project on hold.