GlobalFoundries, STMicro snag €7.4B in EU money for French fab project

GlobalFoundries and STMicroelectronics will receive billions of euros in European funding to build a chip factory in Crolles, France. In a statement Friday, the European Commission announced that the American and Dutch multinationals' joint fab project had received the greenlight. Funding will take the form of direct grants …

[Justthefacts]

I do not think those word mean what you think they mean

“In exchange for these funds, GF and ST have made several concessions. These include manufacturing EU priority orders in the case of future supply shortages,”

What is an “EU priority order”? If both Citroen and Bosch are short, then the Commission get to decide which one gets the chips? Equally, if Bosch want to pay $20k for a wafer of microcontrollers, while Denso are prepared to pay $25k……all Bosch have to do is stick their hand up, declare “shortage”, and GloFo have to sell to Bosch at the lower price demanded? I’ll bring popcorn.

“continued investment in next-gen FD-SOI tech” Why? Deliberately investing in *next gen* FDSOI when everyone GloFo included has done their science and worked out that *IF* you go down to 14nm, then FDSOI is not optimal tech solution? GloFo didn’t stop at 22FDX because they got distracted by butterflies. They made a clear, well-thought out strategic decision, that going lower guaranteed them fourth place in a competition they would lose, for a capex that they couldn’t afford and made no commercial sense. They made the *right* decision that saved the company, that there was a perfectly good business doing what they were already doing. And now the EU wants them to piss it all up the wall, and probably bankrupt the company, just to gain bragging rights in a battle they strategically retreated from a decade ago? Madness.

“and making capacity available to small-to-medium-sized businesses and third-parties to test and develop new products” Manufacturing vanity projects for companies owned by the sons of French politicians, at zero profit margin. FTFY.

“Finally, both companies have agreed to share any profits in excess of current expectations with the French government.” It’s just a guess, but the profit that appears on the balance sheet is likely to match “current expectations” to the third decimal place, leaving precisely zero excess for the French government. Just a pure guess.