[News] Two Semiconductor Fab Projects Abruptly Halted?

The global semiconductor industry is facing numerous challenges, with several renowned fabs halting operations, delaying construction, or shutting down production lines. These developments have caused significant disruptions across the industry.

Recently, the GlobalFoundries-STMicroelectronics fab in Crolles, France, and Sumitomo Electric’s silicon carbide (SiC) fab project have been abruptly halted.

Earlier, Wolfspeed and Intel also announced delays or suspensions for multiple fabs. To tackle these challenges, the companies involved are actively adjusting investment strategies, optimizing cost structures, and seeking financing.

GlobalFoundries-STMicroelectronics Fab in Crolles, France

According to a Bloomberg report on January 7, the joint fab project by GlobalFoundries and STMicroelectronics in France has stalled. Progress on the project has been slow over the past 18 months, and construction has now been suspended.

In July 2022, GlobalFoundries and STMicroelectronics signed an agreement to build a new 12-inch semiconductor fab adjacent to their existing facility in Crolles, France. The total investment was expected to reach €7.5 billion, supported by France’s “European Chips Act” funding. The fab was initially slated to achieve full production capacity by 2026, producing 620,000 wafers annually.

Sumitomo Electric SiC Wafer Fab

Recent media reports indicate that Japan’s Sumitomo Electric has decided to cancel its new SiC wafer fab project due to weak demand in the electric vehicle market and uncertainty regarding demand recovery timelines. Announced in 2023 with a planned investment of ¥30 billion, the project was to be built in Takaoka City, Toyama Prefecture, with production slated for 2027.

Sumitomo Electric had also planned to launch a new production line in Itami City, Hyogo Prefecture, by 2027, targeting a combined annual production capacity of 180,000 SiC wafers. However, this entire plan has now been scrapped.

Industry insiders suggest that Sumitomo Electric may focus its resources on other growing sectors, such as automotive wiring harnesses, power cables for environmental energy, and optical components for data centers, to offset losses in the SiC wafer business and maintain stable overall growth.

In addition to the two aforementioned fabs, several Wolfspeed and Intel facilities have also reported suspensions or delays since 2024. Both major companies are actively implementing measures to overcome the crisis.

Wolfspeed: Durham Fab Closure and German Fab Delays

On August 21, 2024, Wolfspeed announced plans to shut down its 6-inch SiC wafer fab in Durham, North Carolina, citing higher manufacturing costs compared to its 8-inch SiC fab in Mohawk Valley. CEO Gregg Lowe stated that the company is evaluating the closure timeline.

Additionally, Wolfspeed’s planned 200mm SiC fab in Ensdorf, Germany, initially slated to begin construction in summer 2024, has been delayed to 2025.

Intel: Multiple Fab Delays

Intel has postponed construction of its Fab 29.1 and Fab 29.2 facilities near Magdeburg, Germany. The delay is attributed to pending EU subsidy approvals and the need to remove and reuse black soil. Originally planned to begin in summer 2024, construction is now set for May 2025.

The fabs expected to adopt advanced manufacturing processes like Intel 14A (1.4nm) and Intel 10A (1nm), were initially scheduled to start operations by the end of 2027. Intel now estimates production will begin between 2029 and 2030.

Intel’s chip projects in Ohio, USA, have also been delayed. Announced in January 2022 with an initial investment exceeding $20 billion, two fabs in Licking County, Ohio, were expected to start manufacturing chips in 2025. However, due to weak market demand and delayed government subsidies, construction of Fab 1 and Fab 2 is now pushed to 2026–2027, with operations expected to begin in 2027–2028.

(Photo credit: Intel)