The European Commission approved a €2B Italian state aid for STMicroelectronics (NYSE:STM) (OTCPK:STMEF) to set up a new semiconductor manufacturing facility in Catania, Sicily.
The total investment for the integrated chip manufacturing plant to be built by the Switzerland-based company for Silicon Carbide, or SiC, power devices would be €5B (about $5.4B).
“It will strengthen the European semiconductors supply chain and ensure our access to a reliable source of power efficient chips used for example in electric vehicles and charging stations,” said Margrethe Vestager, executive vice-President in charge of competition policy, at European Commission.
The agency noted that the facility will make high performance SiC chips, based on 200mm diameter wafers which will be processed into modules and other devices used, for example by the automotive industry, in Europe and globally.
The facility is expected to be operating at full capacity in 2032.
The Catania Campus will help reverse the tendency of overreliance on imports of devices which are mainly relevant for the European digital and green transition objectives, according to the EU regulator.
The Commission noted that the measure will strengthen Europe’s security of supply and digital sovereignty in semiconductor technologies, in line with the objectives of the European Chips Act.
The EU’s €43B Chips Act, which was announced in 2023, is aimed at supporting local chip manufacturing. Earlier this month, Belgium-based nanoelectronics research hub imec said that certain European research labs were expected to get €2.5B (about $2.72B) in funding under the European Chips Act to establish a pilot line to develop and test future generations of advanced chips.
The U.S., China, Japan and South Korea are among countries which have stepped up efforts to boost domestic chip production to stay ahead in the AI race.
Under the U.S. CHIPS Act, several companies have inked preliminary deals with the U.S. Department of Commerce to get funds.
Intel (INTC) was awarded nearly $20B in grants and loans, Micron Technology (MU) with $6.1B in grants, Taiwan Semiconductor Manufacturing (TSM) with up to $11.6B in grants and loans, Samsung Electronics (OTCPK:SSNLF) with up to $6.4B in grants in the U.S.
Meanwhile, China, reportedly, has established a 344B yuan ($47.5B) investment fund to boost its semiconductor industry, making it the third round of the government-backed financing pool.
China’s push for self-sufficiency comes amid U.S. curbs aimed at restricting Beijing’s access to advanced chips and equipment, including those used for making artificial intelligence, or AI services. The U.S. and its allies including the Netherlands, Germany, South Korea and Japan have also been tightening curbs on the Asian country’s access to advanced semiconductor technology.
