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The European Commission has given the green light to a €2 billion Italian initiative aimed at supporting STMicroelectronics N.V. (NYSE:STM) in establishing and running an integrated chip manufacturing facility in Catania, Sicily.
The facility will produce Silicon Carbide (SiC) power devices, contributing to Europe’s technological self-sufficiency and digital sovereignty as outlined in the European Chips Act.
STMicroelectronics’ project, which is backed by the Italian government, aims to enhance the supply and resilience of semiconductor technologies, which are crucial for the digital and green transitions.
The new plant will manufacture high-performance SiC chips used in various applications, including electric vehicles, fast-charging stations, and renewable energy systems.
Italy has notified the Commission of its intent to support the development of ST’s Catania Campus with a direct grant of approximately €2 billion.
This investment is part of a larger €5 billion project to create a large-scale manufacturing facility for high-performance SiC chips.
The plant will process 200mm wafers into modules and devices for automotive and other industries. Full-scale operations are expected by 2032.
ST has committed to ensuring that the project benefits the entire EU semiconductor value chain, not just Italy.
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The company will also prioritize orders during supply shortages, as stipulated by the European Chips Act, and avoid public service obligations imposed by third countries.
The company has applied for recognition of the Catania Campus as an integrated production facility under the European Chips Act, independent of the State aid assessment.
The European Chips Act, adopted on 8 February 2022, underscores the importance of new production facilities in safeguarding the EU’s supply chain resilience. The Commission’s approval is the third such decision, following similar measures in Italy and France.
Margrethe Vestager, Executive Vice-President in charge of competition policy, said, “The €2 billion Italian measure approved today supports a unique integrated facility for silicon carbide chips. It will strengthen the European semiconductors supply chain and ensure our access to a reliable source of power efficient chips used for example in electric vehicles and charging stations. This will support our digital and green transitions and help create high-skilled employment, while limiting possible distortions of competition.”
Price Action: STM shares are trading higher by 0.81% at $41.28 in premarket at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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