Semiconductor supplier STMicroelectronics and Sanan Optoelectronics plan a joint venture to set up a silicon carbide manufacturing joint venture in Chongqing, China.
The cost of the venture is expected to be about $3.2 billion, including capital expenditure of about $2.4 billion over the next five years. STMicroelectronics said it is expecting financial support from the local government.

The venture aims to produce 200mm silicon carbide devices for STMicroelectronics which are used in electric cars and other industrial power and energy applications, according to a news statement from STMicroelectronics.

The SiC fab is targeting to start production in Q4 2025 and full buildout is anticipated in 2028, supporting the demand in China for car electrification as well as for industrial power and energy applications. In parallel, Sanan Optoelectronics will build and operate separately a 200mm SiC substrate manufacturing facility to fulfill the JV’s needs, using its own SiC substrate process.

“China is moving fast towards electrification in automotive and industrial and this is a market where ST is already well-established with many engaged customer programs. Creating a dedicated foundry with a key local partner is the most efficient way to serve the rising demand of our Chinese customers,” said STMicroelectronics CEO Jean-Marc Chery.

“Being an international, high quality SiC foundry service company, Sanan will also supply its SiC substrate to this new joint venture, by building a dedicated new SiC substrate factory. This is an important step for Sanan Optoelectronics’ ambitions as a SiC foundry,” Simon Lin, CEO of Sanan Optoelectronics, said.