Italy is pressuring STMicroelectronics to increase investment in the country

The government of Giorgia Meloni in Italy has requested chip manufacturer STMicroelectronics (ST) to provide a larger share of investment to Italy. According to insiders, Italy, which holds shares in this semiconductor company, opposes the new three-year term of Jean Marc Chery, CEO of Italian French semiconductor. Italy believes that the company's investment is beneficial to France.

STMicroelectronics has a market value of over 40 billion euros and is one of the few globally important European companies in its strategic semiconductor business. The company focuses on semiconductors used in the smartphone industry and electric vehicles, and its customers include Apple and Tesla.

Under the leadership of Giorgia Meloni, Italy has strengthened its rhetoric and actions regarding French acquisitions of Italian companies, which are seen as hegemonic. Giorgia Meloni launched a battle with Stellantis Automotive Group in January, which owns Italian brands such as Fiat and Alfa Romeo, as well as French brands Peugeot and Citroen, as the company strives to shift car production to lower cost countries/regions. Last November, Giorgia Meloni rejected the acquisition of a local aerospace company by Safran Group in France. Safran Group stated in February this year that it is engaged in "dialogue" with Italian authorities regarding the resumption of acquisitions.

According to a company filing document, the Italian and French governments respectively hold 50% of the shares of a holding company through the Roman Ministry of Finance and the French public bank BpiFrance SA, which itself owns 27.5% of the shares of STMicroelectronics.

According to insiders, Italy is dissatisfied with Jean Marc Chery's recent decision to change the company structure from three main business departments to two business departments. The reduced automotive department is mainly led by Italians, including executive Marco Monti who later left the company.

The person stated that this move reinforces people's overall view that Jean Marc Chery is prioritizing France and resisting Italy's efforts to have a stronger voice in overall decision-making. Jean Marc Chery's current authorization will expire later this year.

A spokesperson for STMicroelectronics stated that the company has taken note of recent media speculation about its leadership and added that its board has not taken further action on this issue since proposing the reappointment of Jean Marc Chery in September last year.

The expert committee authorized by President Macron will release a report on artificial intelligence (AI), which will urge France to increase investment in low-carbon chip production such as Italian French semiconductors, and emphasize the important role that the company can play in green transformation.

The spokesperson stated that the manufacturing focus of Italian French semiconductor is to increase the 300mm chip production capacity in France and Italy, as well as the broadband gap semiconductor silicon carbide production capacity in the core factory in Catania, Italy.

STMicroelectronics plans to establish a semiconductor production base near Grenoble, France with the United States, and France will provide a subsidy of 2.9 billion euros (3.2 billion US dollars) as a demonstration of Macron's efforts to re localize key technologies in Europe.