GENEVA's STMicroelectronics (STM), Europe's No 2 chipmaker by revenue, and Chinese firm Sanan Optoelectronics have said they have agreed to form a US$3.2 billion semiconductor joint venture in the southwestern city of Chongqing, reports Hong Kong's South China Morning Post.

The deal involves the creation of a new 200mm SiC device manufacturing operation that will start production in the fourth quarter of 2025, with anticipated full buildout in 2028.

"China is moving fast towards electrification in automotive and industrial, and this is a market where STM is already well-established with many engaged customer programmes,§ said STM chief executive Jean-Marc Cherry.

"Creating a dedicated foundry with a key local partner is the most efficient way to serve the rising demand of our Chinese customers,§ he said.