France Has No Chips — And No Clue Either
When it comes to microelectronics and semiconductors, France and the EU are strikingly devoid of any strategy. And what, exactly, is the French High Commission for Planning exactly doing?
France’s support for the semiconductor industry? The fix was always in.
Nobody with a functioning brain should be shocked by the French Court of Auditors’ latest report. The findings are as damning as they are predictable: government support, funneled almost exclusively toward the Franco-Italian STMicroelectronics and the CEA-Leti (the state research lab tasked with turning scientific breakthroughs into industrializable technology), is described as “enormous and growing.”
The effectiveness of that aid, meanwhile, is “hampered by the slowness of its disbursement.” And France’s grand plan — with the European Union dutifully trailing behind — will not “close the technological gap accumulated over years.” The French strategy is, in the Court’s carefully neutered language, “insufficiently coordinated with Germany.” Nothing here that wasn’t already obvious to anyone paying attention.
Let’s recall the farce that preceded this diagnosis. With European state-aid rules conveniently loosened — a welcome flexibility, or a carte blanche for industrial folly? — France and Germany launched a full-blown subsidy war to lure foreign giants.
Germany landed TSMC, the world’s number-one chipmaker. France got a partnership with Intel that went nowhere, just like the ST–GlobalFoundries alliance: both now floating in bureaucratic limbo.
The Franco-American joint venture between ST and GlobalFoundries, which promised to double chip production capacity in Europe, was entirely contingent on the American partner’s goodwill. GlobalFoundries ultimately decided it preferred investing at home, pockets stuffed with federal subsidies. Not a single dollar, not a single machine ever landed on French soil.
So yes: nothing works. The Court of Auditors confirms it. Public money flows into corporate coffers with no meaningful oversight — something L’Éclaireur demonstrated exhaustively and a parliamentary inquiry later corroborated.
But the deeper scandal isn’t the opacity. It’s the total absence of strategy. Or rather: what passes for strategy serves no recognizable French national interest.
Back in 2022, when Emmanuel Macron and Bruno Le Maire — parked at ASML for a while when he left the Ministry of Finance; he is now reportedly eyeing the 2027 presidential race, because of course he is — unveiled the ST/GlobalFoundries alliance with great fanfare, an industry insider told us plainly that the whole thing was doomed.
The chip shortage that had triggered the panic was cyclical, not structural; everyone had piled in simultaneously, guaranteeing overcapacity the moment the cycle turned. Worse, the goverment sponsored projects were aimed squarely at the wrong target.
“The main shortages concerned semiconductors around 40 nanometers,” Fabrice Lallement, delegate for the electronics sector, told us at the time. “So we’ll always have problems. Because while we know how to design chips, a large part of production happens abroad — TSMC in particular. There’s a lot of noise around the 10nm node. But today, Renault and PSA need 40nm, not 10nm. The discussions we’re having now will determine what shortages look like in ten years.”
Neither the French nor the German projects were designed to fix the actual shortage — the now-structural tension around 40nm nodes. Why? Because both projects chased advanced technologies that attract the richest subsidies: FD-SOI for France at Crolles, 28nm for Germany in Dresden.
In the meantime, another sector vacuumed up the remaining investment: artificial intelligence. Which, as we argue at length, amounts as it stands today to an elaborate con with zero productivity impact and therefore zero growth contribution.
Were these industrial projects? Or political theater? At STMicroelectronics, barely anyone had heard of GlobalFoundries before Macron announced the partnership. “ST didn’t want to play ball with GF — it was imposed on them,” a source told us at the time. Just as the State — a minority shareholder in ST — had previously imposed the decision to kill R&D on the most advanced technologies.
That is how, ten years ago, ST was made to abandon 14nm FD-SOI — which subsequently found its killer application in 5G. A technology initially developed with public money through the Leti, later taken up by ST, whose patents were then sold off to GlobalFoundries. The same story repeated with 28nm FD-SOI, sold to Samsung. France: faithfully funding innovations it then hands to foreigners.
What strategy governs any of this? France has, on paper, an institution dedicated to exactly this question: the High Commission for Strategy and Planning. L’Éclaireur recommended abolishing it in 2024. We stand by that recommendation. We’ll explain why in a forthcoming piece.