Italy may grant STMicro’s chip factory state aid, German Intel plant still awaits

Italy may grant STMicro’s chip factory state aid, German Intel plant still awaits

The European Commission has allowed Italy to financially support the construction of an STMicroelectronics (STMicro) chip factory. This is the first time that state aid has been allowed under the European Chips Act.

Financial state support for companies is still a hot topic in the EU. However, when it involves setting up a European chip production plant, the strict measures should be more lenient. The European Chips Act is supposed to take care of this, and this is happening for the first time.

Under the responsibility of Margrethe Vestager, European Commissioner for Competition, the EC recently approved Italian state aid for an STMicro chip factory in Catania, on the island of Sicily, just before the European elections. STMicro, through a French and Italian joint venture, is a pan-European chip producer.

The total amount of state aid involved is 2 billion euros, and the total cost of building and operating this new Italian chip factory is 5 billion euros.

SiC processors

The new factory will focus on manufacturing chips for so-called Silicon Carbide (SiC) energy devices. These devices focus, for example, on boosting energy efficiency in electric cars. These types of processors are more expensive to produce than standard processors but are in high demand because of their robust and lightweight structure.

The plant will be the second chip factory on Sicilian soil and should eventually create 30,000 jobs. In addition, the new chip factory fits into the picture of the European Chips Act to counterbalance dependence on Asian or American processor manufacturers.

Germany also wants to use state aid

The state aid now authorized is remarkable because other EU countries have also already submitted applications for state aid. For example, Germany is still waiting for approval to start building chip factories with Intel in its own country. Currently, this application has not yet been approved or disapproved by the EC.

In a statement, the responsible European Commissioner, Vestager, indicated that “changes” would be made in the near future.

Also read: Imec raises 2.5 billion euros for test line for advanced chips