• Earlier this week, STMicroelectronics and the European Investment Bank signed a €500 million financing agreement, the first half of a €1.00 billion credit line to support R&D and high-volume semiconductor manufacturing in Italy and France as part of efforts to bolster Europe’s technological autonomy.

• This latest deal, the ninth between the two parties and bringing total EIB financing for STMicroelectronics to about €4.20 billion, reinforces the company’s central role in Europe’s push to secure its own advanced chip supply, particularly across the full Silicon Carbide value chain in Catania.

• We’ll now examine how this new €500 million EIB-backed funding for European R&D and manufacturing could reshape STMicroelectronics’ investment narrative.

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To own STMicroelectronics, you need to believe in its role as a key European chip manufacturer across automotive, industrial and power applications, with Silicon Carbide at the core of that story. In the near term, the main catalyst remains how quickly end-market demand and inventories normalize, while key risks include Chinese competition in SiC and execution on its manufacturing reshaping; the new €500 million EIB financing supports the capacity side of the thesis but does not remove those risks.

The most directly connected update is STMicroelectronics’ recent confirmation that it expects a better second half of 2025 than the first, helped by improving industrial demand and ongoing footprint reshaping. The EIB-backed credit line aligns with that effort by funding advanced R&D and high-volume European manufacturing, which could help the company support future automotive and industrial design wins if demand recovers as guided.

Yet, investors should be aware that intensifying SiC competition in China could still pressure margins and challenge…

Read the full narrative on STMicroelectronics (it’s free!)

STMicroelectronics’ narrative projects $15.5 billion revenue and $2.2 billion earnings by 2028. This requires 9.4% yearly revenue growth and an earnings increase of about $1.6 billion from $651.0 million today.

Uncover how STMicroelectronics’ forecasts yield a €24.62 fair value, a 10% upside to its current price.

Six members of the Simply Wall St Community value STMicroelectronics between €24.48 and €33.07 per share, showing a wide span of views. Against this backdrop, the new EIB-backed funding highlights how differently people may weigh future manufacturing benefits versus persistent risks around Chinese SiC competition and restructuring execution, so it can pay to compare several perspectives before forming an opinion.