STMicro bags €2B from Europe for Sicily car chip fab

Eurocrats made them an offer they couldn't refuse

STMicro will receive €2 billion ($2.17 billion) from the EU under the European Chips Act to build a manufacturing plant in Italy for high-power semiconductors used in electric vehicles.

The funding, approved by the European Commission Friday is part of a broader effort by Western powers to insulate their semiconductor supply chains from disruption and reduce their reliance on foreign fabs.

The Sicilian fab project is expected to cost a total of €5 billion ($5.4 billion) and will manufacture 200mm silicon carbide (SiC) wafers. The plant is expected to start production in 2026 and by 2033 will be producing an estimated 15,000 wafers a week, and will also function as a R&D center to advanced next-gen power semis.

"The fully integrated capabilities unlocked by the Silicon Carbide Campus in Catania will contribute significantly to ST's SiC technology leadership for automotive and industrial customers through the next decades," CEO Jean-Marc Chery opined in a canned statement.

These components have become increasingly important to electrification efforts, including vehicle charging systems. This is because SiC has proven to be much more efficient at higher voltages compared to traditional silicon-based integrated circuits. Proponents of SiC argue that, when employed, they can can boost the vehicle's range by lowering curb weight and reducing battery wear.

However, EVs aren't the only place where SiC is seeing adoption. These parts are well suited for a variety of high power circuits, like those found in solar electricity systems, energy storage, motors, and even the power supplies used in server farms.

Last week, Infineon annpounced it was working on power supply units (PSUs) that use a combination of silicon, SiC, and gallium nitride to deliver 8kW, and soon 12kW, of capacity to GPU-packed AI servers.

Today, it's not uncommon for such systems to consume in excess of 10kW and next-gen parts are already expected to consume as much as 14.3kW. Thus the ability to pack smaller, more efficient PSUs into these systems is key to supporting more power dense systems.

STMicro has been rather bullish on the future of SiC with Chery predicting that the value of such circuits could exceed $5 billion in annual revenues, largely on the back of EV demand, by the end of the decade.

The Italian chip plant is STMicro's latest manufacturing venture to gain EU support. Last year it and partner GlobalFoundries secured billions in European aid to support the construction of a 300mm wafer fab in Crolles, France.

When fully operational in 2027, the French fab is expected to employ 1,000 workers and produce around 620,000 wafers a year, though 58 percent of that output will come from GlobalFoundries.

STMicro's latest funding announcement is expected to be the first of many. "I'm absolutely sure there will be more investments in other states and I think they will come relatively soon, but I cannot tell you exactly when," European Commissioner Margrethe Vestager was quoted as saying on Friday.

Finalized early last year, the European Chips Act aims to make €43 billion ($47 billion) available to fund the creation of semiconductor research, developing, and manufacturing facilities in the region. European leaders hope these investments will help Europe double its market share in the semiconductor industry to 20 percent by the end of the decade. ®

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