GlobalFoundries suspended its participation in the joint €7.5bn fab with STMicroelectronics in Crolles, France, in mid-2025. The company stated it would align expansion "with customer demand and market conditions"1. The pullback froze €2.9bn in French state aid, because EU rules require private co-investment milestones to be met before subsidies can flow.
The technology choice contributed to the withdrawal. The Crolles facility was planned around FD-SOI (fully depleted silicon-on-insulator), a specialised chip architecture used in automotive sensors and IoT devices. FD-SOI has a narrower customer base than mainstream FinFET (the transistor design in most modern processors). STMicroelectronics is the world's leading FD-SOI manufacturer, but GlobalFoundries' recalculation reflected the reality that demand projections for this niche node were insufficient to justify the co-investment.
EE Times identified the broader structural problem: the Chips Act's subsidy architecture creates a deadlock when private partners pull back2. Subsidies are milestone-gated, meaning the public money cannot be released to keep a project alive when the private partner withdraws. The mechanism works well in an upcycle. In a demand downturn, it freezes rather than stabilises. France now holds €2.9bn in committed state aid with no clear path to disbursement, and STMicroelectronics is left without a construction partner for a facility it cannot build alone.
