STMicroelectronics said to build new $5B silicon carbide factory in Italy
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European semiconductor company STMicroelectronics (NYSE:STM) is reportedly gearing up to open a new silicon carbide plant in Italy, with the initial investment worth some â¬5B, or $5.25B.
The French-Italian semiconductor company is currently discussing the project with Italian authorities and the European Commission, French business magazine L'Usine nouvelle reported.
The plant, which would be housed at STMicro's (STM) mega fab in Catania, Sicily, would expand beyond its 12,000 employees already in the country. Catania is one of STMicro's (STM) two sites in Italy, along with a site near Milan.
The company is hoping to gain a subsidy from Italy that would cover as much as 40% of the total cost, the news outlet added.
STMicro (STM) did not immediately respond to a request for comment from Seeking Alpha.
In July, Europe finalized its own $47B Chips Act to better compete with the U.S. and Asia in the semiconductor industry. The legislation provides subsidies and â¬43B in public and private investment, including â¬3.3B from the EU's budget. The goal is to double the continent's global market share in semiconductors to at least 20% by 2030, up from 10% presently.
As STMicro is a French-Italian company with both governments as stakeholders, it has to invest in both France and Italy equally, a source familiar with the matter told Seeking Alpha.
STMicro (STM) is slated to double its position in silicon carbide next year in an effort to keep and grow its market share, with the proposed plant in Sicily slated to help with this initiative.
Silicon carbide is routinely used for semiconductors inside electric vehicles, as it allows for longer ranges and faster battery charging, but it's not without its challenges. 
Wolfspeed (WOLF), based in Durham, North Carolina, has had issues ramping up its new Mohawk Valley silicon carbide facility. Other chip companies that use silicon carbide for processors include ON Semiconductor (ON) and Infineon Technologies (OTCQX:IFNNY). 
At its investor day in March, Tesla (TSLA) said that it had discovered a way to use less silicon carbide in its vehicles. Colin Campbell, Tesla's president for powertrain engineering, said silicon carbide is an "amazing semiconductor," but it's expensive and "really hard" to scale, so using 75% less of it in cars is a "big win for us."

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