Semiconductor companies GlobalFoundries and STMicroelectronics finalised a plan to jointly establish a manufacturing facility in France, with the country’s government injecting a significant sum into the project.

In a joint statement, GlobalFoundries and STMicroelectronics explained they had concluded a deal to build the facility, following an initial agreement in July 2022, projecting a total cost of €7.5 billion.

The companies added the plant will receive “significant financial support” from the state of France, with Reuters placing the figure at €2.9 billion, more than half of a €5.5 billion finance package the nation set aside for the sector.

State aid is in line with the objectives of the European Commission’s European Chips Act and forms part of France’s 2030 national investment plan in technology and innovations.

The plant will be located next to a current STMicroelectronics facility in south east France.

GlobalFoundries CEO Thomas Caulfield said the companies will collaborate on chip technology for high-demand sectors including automotive, IoT and mobile applications.

The pair’s original agreement targeted getting the plant to full capacity by 2026, producing up to 620,000 300mm wafers per year.