Maltese government to fund STMicroelectronics upgrade in EU boost for microchip sector

European Commission approves €8.1 billion in state aid packages in 14 member states • Malta Enterprise to provide financial backing to STMicroelectronics

A worker in front of a row of microscopes at STMicroelectronics's Kirkop plant. The Italian-French chipmaker employs more than 1,800 people in Malta. (Photo: STMicroelectronics Malta)
A worker in front of a row of microscopes at STMicroelectronics's Kirkop plant. The Italian-French chipmaker employs more than 1,800 people in Malta. (Photo: STMicroelectronics Malta)

STMicroelectronics Malta will receive financial backing from the Maltese government to upgrade its production lines as part of an EU initiative to boost microchip production in the bloc.

The project was submitted by Malta Enterprise, a government agency, in partnership with STMicroelectronics and is part of a joint initiative with France and Italy.

STMicroelectronics, an Italian-French company, set up shop in Malta in 1981 and has grown to become one of the largest private sector employers in the manufacturing sector. The company employs more than 1,800 people and exports more than €700 million every year. The Malta plant is involved in backend operations that mainly service the automotive and mobile telephony sector.

Approval for the public investment arrived on Thursday when the European Commission approved up to €8.1 billion in state aid packages proposed by 14 member states.

The approval was granted under EU State aid rules as part of the programme known as Important Project of Common European Interest intended to support research, innovation and the first industrial deployment of microelectronics and communication technologies across the value chain.

The 14 member states forming part of this EU-wide project are: Austria, Czechia, Finland, France, Germany, Greece, Ireland, Italy, Malta, the Netherlands, Poland, Romania, Slovakia and Spain.

Under the plan, the member states will provide up to €8.1 billion in public funding, which is expected to unlock additional €13.7 billion in private investments. The project involves 56 companies, including SMEs and start-ups, and 68 projects.

The strategic project is part of the EU’s effort to rival the US decision to dish out billions in public subsidies to entice chipmakers to build facilities in the US to counter China’s primacy in microelectronics production.

Malta investment to incorporate advanced automation

No details were given as to the amount of money Malta will disburse to support the Kirkop-based STMicroelectronics but it is expected to run into millions.

A spokesperson for Malta Enterprise told MaltaToday that through the Commission’s approval, the agency will back STMicroelectronics Malta in “its quest to reach the pinnacle of Smart Factory and Industry 4.0 standards”.

“The investment is set to incorporate advanced automation concepts, designed to elevate the quality of devices manufactured in Europe. The project will encompass both Research Development and Innovation and First Industrial Deployment activities for Advanced Back-End Manufacturing,” the spokesperson said.

Malta Enterprise added that the project also promises “significant spill over effects, including partnerships with the University of Malta and various industrial players”.

Project to create 8,700 new direct jobs across members states

According to the European Commission the initiative across 14 member states concerns research and development projects covering microelectronics and communication technologies across the whole value chain from materials and tools to the chip designs and manufacturing processes.

“These projects aim at enabling the digital and green transformation by creating innovative microelectronics and communication solutions, and developing energy-efficient and resource-saving electronics systems and manufacturing methods,” the Commission said. It added: “They will contribute to the technological advancement of many sectors, including communications (5G and 6G), autonomous driving, artificial intelligence and quantum computing. They will also support companies active in the energy generation, distribution and use in their green transition.”

The first novel products are expected to be introduced to the market as early as 2025 and the completion of the overall project is planned for 2032, with timelines varying in function of the project and the companies involved.

Around 8,700 direct jobs are expected to be created, and many more indirect ones.