Semiconductor suppliers STMicroelectronics and Sanan Optoelectronics announced a new venture to manufacture silicon carbide in Chongqing, China, on Wednesday.

The firms estimated that the initiative will cost around $3.2 billion, including $2.4 billion in capital expenditure over the next five years.

The business will only manufacture silicon carbide devices for STMicroelectronics, which are utilised in electric vehicles and other industrial power and energy applications.

"China is rapidly electrifying its automotive and industrial sectors, and this is a market where ST is already well-established with many engaged customer programmes." Creating a dedicated foundry with a significant local partner is the most efficient method to meet our Chinese customers' escalating demand," says Jean-Marc Chery, CEO of STMicroelectronics

STMicroelectronics N.V., sometimes known as ST or STMicro, is a Dutch multinational corporation and technological company of French-Italian ancestry located in Plan-les-Ouates, Switzerland, and listed on the French stock exchange.

Sanan Optoelectronics is a Chinese electrical and electronic manufacturing firm situated in XIAMEN, FUJ.