Chip maker STMicroelectronics (STM.US) announced on Wednesday that it will invest $60 million in its factory in Tours, France, to build a pilot production line for advanced semiconductor manufacturing technology.

The French-Italy joint venture said it will develop a new generation of advanced process technology at the Tour factory.As early as October last year, after STMicroelectronics announced its large-scale restructuring plan, it had begun to move out several old chip production lines from the Tour factory.

STMicroelectronics said in a statement that the project focuses on the construction of advanced manufacturing infrastructure, and has re-planned core tasks for some factories in France and Italy to support these factories to achieve long-term and stable development.

As one of Europe's largest chip manufacturers, STMicroelectronics launched a cost-cutting plan after its major markets suffered years of downturn and planned to lay off employees at factories such as Tours.This move has aroused opposition from trade unions and relevant stakeholders.Currently, the Italian and French governments jointly hold 27.5% of the chip maker through a holding company.

The new technology planned to be developed this time is called Panel-Level Packaging (PLP).With this technology, STMicroelectronics can make chips on large square panels, replacing traditional small circular silicon wafers.

The company revealed that it has applied the technology to a customer at its factory in Muar City, Malaysia, which can produce more than 5 million chips per day.

In traditional chip manufacturing, many production steps need to be completed in Asia where manufacturing costs are lower; PLP technology can eliminate these steps, and its economies of scale and higher automation levels make chip production possible in Europe.

STMicroelectronics expects that the pilot production line at the Tour factory will be put into operation in the third quarter of 2026.