STMicroelectronics, GlobalFoundries win EU approval for French chip factory

BRUSSELS (Reuters) - Chipmakers STMicroelectronics and GlobalFoundries secured EU approval on Friday to build a chip factory with French state aid in France.

The companies announced their plan in July last year, with the new facility to be situated next to STM's existing plant in Crolles and targeted to reach full capacity by 2026, with up to 620,000 wafers per year of production at a size of 18-nanometers.

“The aid will take the form of direct grants to ST and to GF, to support their investments in the project worth totally 7.4 billion euros ($8.13 billion),” the European Commission said in a statement.

The EU executive, which acts as the competition enforcer in the 27-country bloc, said the companies agreed to satisfy EU priority rated orders during a supply shortage and will also share potential additional profits beyond current expectations with France.

The United States and the European Union are offering billions in state subsidies for home-grown chip factories to cut dependency on Asian suppliers.

The EU wants to double its global market share to 20% in 2030 under its Chips Act agreed earlier this month.

($1 = 0.9103 euros)

(Reporting by Foo Yun Chee, editing by Marine Strauss and Susan Fenton)