STMicro, GlobalFoundries win $8B in aid to build French chip factory
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STMicroelectronics (NYSE:STM) and GlobalFoundries (NASDAQ:GFS) fell fractionally in pre-market trading on Friday even as the pair received approval for French state aid to build a semiconductor plant in the country.
In a statement, the European Commission said the aid would be in the form of direct grants to both STMicroelectronics (STM) and GlobalFoundries (GFS) worth 7.4B euros or $8.13B.
The regulatory agency added that the two companies have agreed to terms on EU priority rate orders if a supply shortage happens and that profits beyond current expectations will be shared with France.
Earlier this month, the European Union passed the 45Bâ¬ ($47B) Chips Act to help the 27-country bloc better compete with the U.S. and Asia.
The U.S. CHIPs Act, which was passed last year, also has a similar profit-sharing provision for companies that "significantly exceed the projections." 
STMicroelectronics (STM) and GlobalFoundries (GFS) first announced their plans to build a chip plant in Crolles, France in July 2022.
The facility is targeted to reach full capacity by 2026, with production up to 620,000 300mm wafers per year. 
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