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GlobalFoundries and STMicro shake on €7.5bn chip facility in France

Daniel Nenni

Admin
Staff member
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New York headquartered GlobalFoundries and Switzerland-headquartered STMicroelectronics (STMicro) have confirmed a deal to build a jointly-operated semiconductor manufacturing facility in Crolles, in France, at a total project cost of €7.5 billion – of which around €3 billion will reportedly be provided by the French government as part of European Commission’s European Chips Act and France’s own technology investment plan.

The new site will be adjacent to an existing STMicro facility. It is billed as a high-volume chip production plant, specifically of feature-rich 300mm silicon wafers, for the “automotive, industrial, IoT, and communication infrastructure” markets. The pair expect it to deliver over $20 billion in annual revenues, they said. Global production capacity of 300mm wafers is set to increase to an all-time high of 9.6 million wafers per month in 2026, according to SEMI, the global industry association representing the electronics supply chain.

SEMI identifies GlobalFoundries and STMicro among the primary manufacturers to drive up production in the period to 2026, along with the likes of Hua Hong Semiconductor, Infineon, Intel, Kioxia, Micron, Samsung, SK Hynix, SMIC, Texas Instruments, TSMC and UMC. The two companies noted the contribution of the French government in the new project, which news agency Reuters placed at €2.9 billion.


A statement said: “The program represents an overall projected cost of €7.5 billion for CAPEX, maintenance and ancillary costs. The new facility will benefit from significant financial support from the State of France. The aid measure, in line with the objectives set out in the European Chips Act and part of the ‘France 2030’ plan, recently received approval from the European Commission.”

Thomas Caulfield, president and chief at GlobalFoundries, commenyed: “We are further expanding GF’s presence within Europe’s dynamic technology ecosystem while benefiting from economies of scale to deliver additional capacity in a highly capital efficient manner. Together we will deliver GF’s market leading FDX technology and ST’s comprehensive technology roadmap, in alignment with customer demand which is expected to remain high for automotive, IoT, and mobile applications over the next decades.”

Jean-Marc Chery, president and chief at STMicro, said: “Today marks an important milestone for ST, for GF as well as for Europe. This could not have been achieved without the support of the French government as well as of the European Commission. We will further reinforce the European and French FD-SOI (fully-depleted silicon-on-insulator) ecosystem, building more capacity for our European and global customers in complex, advanced technologies for key end-markets including automotive, industrial, IoT and communication infrastructure.”

 
They expect $20 billion in annual revenue from one fab that’s not remotely close to leading edge? Can someone explain the math to me?
To add on GF’s highest quarter ever was $2B. The only logical explanation besides lying would be a typo or misquote/misspoke. And frankly all three sound unlikely, so I’m am thoroughly stumped
 
To add on GF’s highest quarter ever was $2B. The only logical explanation besides lying would be a typo or misquote/misspoke. And frankly all three sound unlikely, so I’m am thoroughly stumped
What's even more amazing is that TSMC's annual revenue is about US$75B, and it has eight major fabs. 75/8 is ~US$9.4. So this GF/STMicro miracle fab is going to produce more than twice the annual revenue of the average TSMC fab. Good luck with that. :)
 
They expect $20 billion in annual revenue from one fab that’s not remotely close to leading edge? Can someone explain the math to me?

The average revenue per wafer for this STM and GF joint project needs to be at least US$32,258 to achieve $20 billion annual revenue. Considering it's not a leading edge technology (18nm) and targeting "automotive, industrial, IoT, and communication infrastructure" market, I am 99.99999% confident that it is a typo or miscommunication.


"The companies announced their plan in July last year, with the new facility to be located next to STM's existing plant in Crolles and targeted to reach full capacity by 2028, with up to 620,000 wafers per year of production at a size of 18-nanometers."

Source: https://www.reuters.com/markets/eur...ew-stmicroglobalfoundries-factory-2023-06-05/
 
They expect $20 billion in annual revenue from one fab that’s not remotely close to leading edge? Can someone explain the math to me?
No !

But we should also consider that $20bn annual revenue on a one off Euro7.5bn ($8.1bn) investment would be an astonishing ROI if the wafers sell for any reasonable margin. And that STM's current annual sales are $16.82bn (2022) spread over multiple fabs (and a lot of oustsourcing to TSMC).

Any remotely competent journalist should have checked/challenged this.

But that's modern journalism for you - cutting and pasting press releases without engaging brains.
 
They expect $20 billion in annual revenue from one fab that’s not remotely close to leading edge? Can someone explain the math to me?
20B$/year is a pure STMicroelectronics objective, GlobalFoundries being around only 8B$ (8.108B$ in 2022) still well below the 10B$/year like it was historically the case of STMicroelectronics…
STMicroelectronics, following the internal evolutions projects they previously did to boost their revenue above 10B$/year then given strong market evolutions last year in 2022 which already boomed their revenue above 15B$, they also created this project to build another new of their fabs in Crolles with GlobalFoundries financially helped by the European Chips Act and also helping/contributing to further boost their revenue to the 20B$/year now expected/dreamed to be achieved by 2025 ~ 2027…

STMicroelectronics will already go near to that this year with expected revenues around 17 B$ ~ 17.8B$, growing 5% ~ 10% YoY with/thanks to their big focus in automotive market while the global semiconductor market while many/most other companies will still decrease their revenues this year, including big ones and GlobalFoundries included in their European Chips Act project in Crolles…
(i) TSMC YTD May 2023 now a bit further decreasing to -1.9% YoY and now expecting/hoping (despite their yield/capacity problems in their 3nm they will focus on Apple and Nvidia…) to finally only decrease “low to mid single digit” (-1% ~ -5%) for the full year 2023…
(ii) GlobalFoundries Q1 2023 a bit more decreasing -5.1% YoY, with Q2 2023 further expected to decrease -7.18% ~ -9.18% YoY but without visibility on their full year 2023 expectation…
(iii) UMC YTD May 2023 is much strongly decreasing, -17.4% YoY and they don’t expect any substantial recovery in 2H23…

And in addition to all that and the European Chips Act with GlobalFoundries, STMicroelectronics announced mid of this week 7th of June the signature of an agreement of joint venture with the Chinese company Sanan Optoelectronics for 200mm SiC manufacturing in Chongqing starting in end of 2025 and full capacity in 2028 to further boost their revenues with energy and power products in the automotive and industrial markets expected to contribute at least to 5B$/year revenue by 2030 and being a consolidation of their 20B$/year objective.
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And also apparently, in addition to their other/recent new fab projects, STMicroelectronics and GlobalFoundries mentioned recently end of last week that their company like many (~ 10…) other ones could potentially buy the Nexperia (in Chinese Wingtech group…) old 200mm small Newport Wafer Fab that, end of last year in November 2022, the UK government ruled to be sold by Nexperia to be out of Wingtech…

It is not very sure that either STMicroelectronics or GlobalFoundries will finally buy that, but for STMicroelectronics it will be coming back to their past historical activity in UK with this fab because, when Thomson Semiconducteurs merged with SGS in 1987 becoming SGS-Thomson Microelectronics NV who soon few years later in 1989 bought INMOS with its Newport Wafer Fab and was then renamed later STMicroelectronics in 1998…

This Newport Wafer Fab was acquired by other companies many times (which might again be the case in the future ???…), International Rectifier in 2002 who was acquired by Infineon in 2015 who sold the Newport Wafer Fab to Nexperia in 2021…
 
And also apparently, in addition to their other/recent new fab projects, STMicroelectronics and GlobalFoundries mentioned recently end of last week that their company like many (~ 10…) other ones could potentially buy the Nexperia (in Chinese Wingtech group…) old 200mm small Newport Wafer Fab that, end of last year in November 2022, the UK government ruled to be sold by Nexperia to be out of Wingtech…

It is not very sure that either STMicroelectronics or GlobalFoundries will finally buy that, but for STMicroelectronics it will be coming back to their past historical activity in UK with this fab because, when Thomson Semiconducteurs merged with SGS in 1987 becoming SGS-Thomson Microelectronics NV who soon few years later in 1989 bought INMOS with its Newport Wafer Fab and was then renamed later STMicroelectronics in 1998…

This Newport Wafer Fab was acquired by other companies many times (which might again be the case in the future ???…), International Rectifier in 2002 who was acquired by Infineon in 2015 who sold the Newport Wafer Fab to Nexperia in 2021…

Newport not so scenic as Crolles ...
 
20B$/year is a pure STMicroelectronics objective, GlobalFoundries being around only 8B$ (8.108B$ in 2022) still well below the 10B$/year like it was historically the case of STMicroelectronics…
STMicroelectronics, following the internal evolutions projects they previously did to boost their revenue above 10B$/year then given strong market evolutions last year in 2022 which already boomed their revenue above 15B$, they also created this project to build another new of their fabs in Crolles with GlobalFoundries financially helped by the European Chips Act and also helping/contributing to further boost their revenue to the 20B$/year now expected/dreamed to be achieved by 2025 ~ 2027…

STMicroelectronics will already go near to that this year with expected revenues around 17 B$ ~ 17.8B$, growing 5% ~ 10% YoY with/thanks to their big focus in automotive market while the global semiconductor market while many/most other companies will still decrease their revenues this year, including big ones and GlobalFoundries included in their European Chips Act project in Crolles…
(i) TSMC YTD May 2023 now a bit further decreasing to -1.9% YoY and now expecting/hoping (despite their yield/capacity problems in their 3nm they will focus on Apple and Nvidia…) to finally only decrease “low to mid single digit” (-1% ~ -5%) for the full year 2023…
(ii) GlobalFoundries Q1 2023 a bit more decreasing -5.1% YoY, with Q2 2023 further expected to decrease -7.18% ~ -9.18% YoY but without visibility on their full year 2023 expectation…
(iii) UMC YTD May 2023 is much strongly decreasing, -17.4% YoY and they don’t expect any substantial recovery in 2H23…

And in addition to all that and the European Chips Act with GlobalFoundries, STMicroelectronics announced mid of this week 7th of June the signature of an agreement of joint venture with the Chinese company Sanan Optoelectronics for 200mm SiC manufacturing in Chongqing starting in end of 2025 and full capacity in 2028 to further boost their revenues with energy and power products in the automotive and industrial markets expected to contribute at least to 5B$/year revenue by 2030 and being a consolidation of their 20B$/year objective.
View attachment 1226
Nokokara has the right idea. The exact quote from a press release is:

“Today marks an important milestone for ST, for GF as well as for Europe. This could not have been achieved without the support of the French government as well as of the European Commission,” said Jean-Marc Chery, President and CEO of STMicroelectronics. “We will further reinforce the European and French FD-SOI ecosystem, building more capacity for our European and global customers in complex, advanced technologies for key end-markets including automotive, industrial, IoT and communication infrastructure, as they transition to digitalization and decarbonization. This new manufacturing facility will support our $20 billion+ revenue ambition.”

 
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