ST, GloFo suspend plan for joint wafer fab, say reports

STMicroelectronics and GlobalFoundries have decided to shelve a €7.5 billion plan for a joint FDSOI wafer fab to be built at Crolles in France, according to reports.

The prospects for the plan to make to be picked up later are said to be “uncertain.”

The 300mm joint venture plan was announced in 2022 amid excitement around the European CHIPS Act and the terms were agreed in June 2023. The fab was expected to be constructed and at full manufacturing capacity by 2026.

However, in the 18 months since the formal announcement no progress has been made and European markets for automotive and industrial chips have been weak with signs of overhanging inventories.

At the same time GlobalFoundries has been prioritizing investment in US and STMicroelectronics has been prioritizing overseas sales with such things as its China-for-China strategy.

ST also flagged in recent financial results that it expected a weak start to 2025 in terms of its sales and a planned corporate “resizing” program that is being drawn up with the goal of saving the company close to US$1 billion per year in operating costs by 2027.

GlobalFoundries was reportedly the lead investor in the joint venture with 58 percent and ST holding 42 percent. The French government was prepared to provide €2.9 billion. About 38.6 percent of the total cost.

The GF-ST plan seems to have joined another that has been shelved – that of Intel for two wafer fabs in Magdeburg, Germany. Both appear to have suffered from the fact that there is insufficient electronics manufacturing in Europe to create demand for major fab building projects.