French to pay STMicro €600 million to double production back home

STMicroelectronics, the largest chip maker in Europe, said Monday that it planned to invest almost €2 billion in conjunction with the French government to develop a new line of microprocessors for smartphones, TV set-top boxes and home routers.

The market for such chips is expected to grow to €67 billion this year, according to World Semiconductor Trade Statistics, a California industry research organization.

The investment would allow STMicro to double its production capacity of such chips at its factory in Crolles, France, potentially making it a stiffer rival to Broadcom, Texas Instruments, Infineon Technologies and Sony - according to the New York Times.

STMicro, which is based in Geneva, said it planned to spend €1.3 billion through 2017 on new research and development and to expand chip production at Crolles, a town near Grenoble in the French Alps.

The company also has a microchip production line in Malta.

France, along with regional and municipal governments in and around Crolles, would contribute €600 million to the project, which is part of an industry the government is eager to promote.

France and Italy hold a combined 27.5 percent stake in STMicro, making them the biggest shareholders in the chip maker.

A spokesman for the company, Alexis Breton, said that most of the investment would be used to develop faster and more efficient chips for TV set-top boxes, smartphones and routers to control home security, heating, air and entertainment systems wirelessly.