On Friday, the European Commission gave its approval for Italian government assistance to STMicroelectronics (STMPA.PA) for the construction of a 5 billion euro ($5.4 billion) chip facility. This move comes as Europe strives to decrease its dependence on Asian imports for crucial manufacturing components.
Located in Catania, Sicily, the plant will receive approximately 2 billion euros in direct grants from Rome. Its focus will be on producing specialized microchips aimed at enhancing energy efficiency in electric vehicles.
The COVID-19 pandemic-induced disruptions in global supply chains and escalating trade tensions with China have underscored Europe’s vulnerability to Asian chip supplies. Recent disturbances along the Red Sea trade route have further exacerbated these concerns.
In response to the United States’ substantial incentives to attract chip manufacturers, the European Union has introduced its own Chips Act, aiming to incentivize the production of key components crucial to various industries, including computing and automotive.
According to a statement by the Commission, the Catania campus will help counteract Europe’s reliance on imports of devices essential for achieving its digital and green transition goals.
The STMicro plant will specialize in producing chips made from silicon carbide, known for its superior energy efficiency compared to standard silicon.
STMicro’s investment reflects its confidence in the resilience of the electric vehicle market and the increasing adoption of silicon carbide chips by automakers. The establishment of a large, integrated European plant for manufacturing and packaging silicon carbide chips is expected to have significant positive impacts on the regional semiconductor ecosystem and ensure regional supply security, the Commission noted.
