Thales, Radiall, and Foxconn are in talks to build a semiconductor assembly and test facility in France.

The facility will specialize in outsourced semiconductor assembly and testing operations (OSAT).

It is projected to reach an annual production of over 100 million system-in-package units by 2031.

Thales stated the investment may exceed €250 million (US$281.8 million), though no final site or decision timeline has been shared.

The project aims to strengthen Europe’s chipmaking capacity and support its push for technological sovereignty.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Europe’s strategic push to rebuild semiconductor capacity

The Thales-Radiall-Foxconn facility represents a critical step in Europe’s semiconductor recovery strategy after decades of decline.

European semiconductor production capacity has fallen dramatically from 15% of global share in the 1990s to less than 10% by 2020, while China (20%), Taiwan (19%), and other Asian nations now dominate production 1.

This €250 million investment aligns with the broader European Chips Act, which aims to increase the continent’s semiconductor manufacturing to 20% of global capacity by 2030, backed by €43 billion in funding initiatives 1.

The strategic importance of this move is highlighted by the fact that the European semiconductor ecosystem employs approximately 250,000 people directly and supports 2.5 million jobs across the entire value chain 2.

The focus on System-in-Package (SiP) technology is particularly relevant as industry projections show global chip demand doubling by 2030, driven by digitalization and artificial intelligence applications 2.

2️⃣ OSAT operations becoming critical in semiconductor supply chain resilience

This new facility focuses specifically on Outsourced Semiconductor Assembly and Test (OSAT) operations, a segment that has seen substantial global growth.

The global OSAT market grew 12.36% in 2020 to $33.5 billion, with projections showing continued expansion to $46.24 billion by 2028 at a CAGR of 5.5% 34.