STMicroelectronics N.V. STM shares are trading higher on Wednesday after the company announced a joint venture with Sanan Optoelectronics to manufacture 200mm semiconductors in China.
The Details:
The new silicon carbide fabrication facility is expected to begin production in the fourth quarter of 2025 with the final buildout being completed by 2028. The joint venture will make SiC devices exclusively for STMicroelectronics and will support the increasing demand in China for electric vehicles, as well as industrial and energy applications.
The total cost for the full buildout of the joint venture is estimated to be $3.2 billion and will be financed by contributions from STMicroelectronics and Sanan Optoelectronics, as well as local government funding and loans to the joint venture.
Jean-Marc Chery, president and CEO of STMicroelectronics, said, "This JV is expected to be one of the enablers of the opportunity we see to reach $5B+ SiC revenues by 2030. This initiative is consistent with ST 2025-27 $20B+ revenue ambition and the associated financial model, previously communicated to the financial markets."
On Monday, STMicro also announced a separate agreement with GlobalFoundries, Inc. GFS to build a new manufacturing facility for 300mm semiconductors in France.
Related News: STMicroelectronics & GlobalFoundries Seal Deal For French Factory Worth €7.5B
STM Price Action: According to Benzinga Pro, STMicroelectronics shares were trading over 2% higher at $45.87 at the time of publication.
Image: Gerd Altmann from Pixabay
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
