France will manufacture chips and Europe will be able to end its technological dependence

Deepak Gupta July 11, 2022
Updated 2022/07/11 at 8:47 PM

The war has brought nothing positive in terms of what it takes to human life and the development of the planet. However, the other side of the war showed how dependent Europe was on allies that could become enemies. Despite the moment we are living, with difficulties at various levels, this prostrate reality in the eyes of the rulers of the old continent can be considered a benefit of the war. One example is France’s decision to build chip factories.

This action will help Europe to end its technological dependence.

European Chip Act: technological manumission letter

After Intel in Germany, Europe will have a new chip factory. It will be the second unit on European soil and will be located in Crolles, in southeastern France. The project was announced today and is a new step in the European Chip Act, the European Union's grand plan to end Asian and US dependence for semiconductor production.

Chip manufacturing will be in the hands of two major manufacturers. STMicroelectronics and GlobalFoundries will build the first semiconductor factory on French soil. The goal is for it to be completed in 2026 and it is estimated that it will employ around 1,000 people.

This factory will have an investment of 5.7 billion euros, in addition to receiving public funding from the French government as part of European funds. By comparison, Intel will invest around $17 billion in its factory in Magdeburg, near Berlin.

France joins Germany in the race to manufacture chips

The two big EU countries have now made official their plan to have their own chip factory. The French government did not specify how much public funding it would receive, but described the type of chips to be manufactured.

It won't be higher-level transistors, but 18-nanometer chips for automobiles, IoT and other applications. In other words, the bet is on transistors for the bulk of the industry, but not for the latest generation. in total expect to produce around 300 million wafers per annum.

The French manufacturing will be owned by STMicroelectronics, the French-Italian company that is among the world's top ten semiconductor producers, and GlobalFoundries, an American manufacturer working for AMD, Broadcom and Qualcomm. However, neither of these two companies matches the profile that Thierry Breton, the European High Commissioner, expressed when the European chip law was passed.

Europe's objective is attract a manufacturer capable of producing 2 or 3 nanometer chips. So far it hasn't been able to do that. One of the problems is that there are few companies in the world capable of doing this. The big ambition is for Taiwan Semiconductor Manufacturing (TSMC) or Samsung to apply for Europe, but there is no confirmed news beyond preliminary talks.

In comparison, Samsung announced at the end of 2021 the construction of a chip factory in Texas, with an investment of around 17 billion dollars. Likewise, TSMC will invest approximately $12 billion in Arizona.

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