Two major companies, one American and the other Franco-Italian, have announced the creation of a semiconductor factory in southeastern France. This comes after French carmaker Renault said on Tuesday that car sales fell in the first half of this year, affected by a global shortage of semiconductors.
At the "Choose France" investment summit in Versailles during the week, Franco-Italian STMicroelectronics and US GlobalFoundries said they would build a factory in Crolles near Grenoble (Isère).
The investment of 5.7 million euros will create more than 1,000 jobs.
The factory will stand on an existing site belonging to STMicroelectronics, France's largest manufacturing plant.
The aim is to double the current level of production and produce chips of various sizes up to 18 nanometers.
Semiconductors are found in most everyday appliances and accessories, such as automobiles, airplanes, washing machines, solar panels, and video game consoles.
"This project will significantly strengthen France's manufacturing capacity for technology and contribute to the resilience of both France and Europe in terms of industrial supplies and components," the Elysee Palace wrote in a statement.
Industrial sovereignty
French Economy Minister Bruno Le Maire called it "the biggest industrial investment of the last decade, apart from nuclear, and a step forward towards industrial sovereignty".
He was due to visit the site with President Emmanuel Macron on Tuesday.
Demand has skyrocketed since the start of the Covid-19 pandemic, triggering global shortages and exposing France and Europe's dependence on Asian production.
Europe wants to increase its share of global semiconductor production to 20 percent, up from 10 percent today.
The new factory will be part of the Chips Act, a program designed by the European Union to match Asia and the United States as world leaders in semiconductor production.
Among other investment projects announced at Choose France is Vietnamese carmaker Vinfast, which is set to open 25 workshops and showrooms across France, creating around 400 jobs by 2023.
Sales of Renault cars have fallen
Meanwhile, French carmaker Renault said on Tuesday that sales of its conventional and electric vehicles fell in the first half of this year, affected by a global shortage of semiconductors.
It said it sold 1,000,199 units in the first half of 2022, down 12 percent compared to the same period last year. Figures for both years did not include sales in Russia.
Renault said the drop in sales comes "in a context disrupted by the semiconductor crisis and marked by the shutdown of the group's activities in Russia" due to the Ukraine crisis.
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Semiconductors are electronic components that are indispensable in both conventional gasoline and electric vehicles.
A global shortage of such parts has forced automakers around the world to temporarily reduce or even stop production.
Renault said its own brand continued to grow strongly in the electrified market.
"Electrified markets in Europe are booming and Renault is well positioned to meet this new customer demand with the right products," said Fabrice Cambolive, deputy head of the Renault brand.
“In the second half of the year, we will accelerate the electrification of our range with the launch of the all-new Megane E-Tech electric, Kangoo E-Tech electric and New Austral,” Cambolive said.
The E-Tech range – electric vehicles and hybrid powertrains – accounted for 36 percent of passenger car sales in Europe in the first half of 2022, compared with 26 percent in 2021, Renault said.
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