The European Investment Bank (EIB) has announced  600 million euro (Rs 5,016 crore) loan to STMicroelectronics, a leading semiconductor company to escalate its R&D and pre-industrialisation activities in Europe.  

In a statement, the company said that the operation concerns investments in R&D activities for innovative technologies and components, as well as in pilot production lines for advanced semiconductors. These investments will be implemented in STMicroelectronics’ existing facilities in Italy (Agrate and Catania) and France (Crolles). "They will contribute to the development of technologies and products to address the major challenges of environmental transition and digital transformation in all sectors" the statement said. STMicroelectronics, has so far received  3.15 billion euros (Rs 26,421 crore) worth of loan assistance from EIB for its seven operations. 

The development is significant considering the current shortage of semiconductors amidst the pandemic which has drastically impacted several manufacturing and IT sectors including automotive amongst others. The global semiconductor market is currently valued over 500 billion euros (Rs 4,180,500 crore) and is expected to double by 2030. Europe, which is considered amongst the most matured automotive markets, currently accounts for nearly  10 percent of world production capacity, a sharp decline compared to previous decades when it was close to 24 percent in 2000s and even higher at 44 percent in 1990s. 

Jean-Marc Chery, president and CEO, STMicroelectronics, said the new loan complements the various existing instruments supporting the semiconductor industry, such as the important projects of common European interest (IPCEI) and others that are currently being set up by the European Commission and the Member States. "It is essential to work in Europe on the whole value chain: R&D, design and manufacturing, in collaboration with the different European ecosystems," said Chery, adding that  STM will contribute to the goal of 20 percent of global production in Europe by 2030. 

STMicroelectronics currently employs over 48,000 people working with more than 200,000 customers and partners.  According to Ambroise Fayolle, who is EIB Vice-President,  the  600 million euro new loan illustrates Europe’s commitment to the semiconductor sector, which is crucial to the future of its economies and strategic autonomy.