STMicroelectronics and Sanan plan silicon carbide venture in China

PARIS (Reuters) - Semiconductor supplier STMicroelectronics and Sanan Optoelectronics plan to set up a silicon carbide manufacturing joint venture in Chongqing, China, they said on Wednesday.

The companies said the cost of the venture was expected to be about $3.2 billion, including capital expenditure of about $2.4 billion over the next five years.

The venture will produce silicon carbide devices exclusively for STMicroelectronics which are used in electric cars and other industrial power and energy applications.

"China is moving fast towards electrification in automotive and industrial and this is a market where ST is already well-established with many engaged customer programs. Creating a dedicated foundry with a key local partner is the most efficient way to serve the rising demand of our Chinese customers," STMicroelectronics CEO Jean-Marc Chery said.

(Reporting by Sudip Kar-Gupta; editing by David Goodman and Jason Neely)