Marseille-Provence: A center of microelectronics
07/01/1999
Within the last 10 years, the Marseille-Provence region in France has acquired an international reputation in certain high-technology sectors. Microelectronics companies clustering in the region include the French-Italian giant STMicroelectronics (STM) and Atmel Corp. from California, as well as numerous small- and medium-sized companies (see table). Together, they account for over 25% of France's semiconductor production and provide work for 4000 people, with sales of nearly 8.4 billion francs in 1995. Within the next five years, the region estimates that its share of microelectronics production will climb to 40% of France's total and employ 6000 people.
The major players
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The village of Rousset, the center of the microelectronics industry in Marseille-Provence, is home to some 30 microelectronics companies. The French firm Eurotechnique settled at the foot of Mount Sainte-Victoire in 1977. Thomson-CSF bought out Eurotechnique in 1983, then merged with SGS, a subsidiary of the Italian company IRI, to form the Group SGS-Thomson (now called STMicroelectronics). The Rousset plant is now the biggest 150mm wafer fabrication site of the group, which has become the ninth largest manufacturer of semiconductors. In 1997, STM had a turnover of $4.02 billion and invested $610 million in R&D. Its Rousset site employs 2200, a figure that will climb to nearly 3000 by next year, when "Rousset 2000," a new 200mm wafer fab unit, will be inaugurated. The new factory represents an investment of $800 million.
The success of STM inspired some of its executives to establish their own companies. In 1986, Jean-Luc Grand-Clement created European Silicon Structures (ES2), a producer of ASICs, in Rousset. The company hit a rough patch financially and started looking for outside investment to strengthen its capital base and product development.
 Companies in the Marseille-Provence region are expected to employ 6000 workers in microelectronics production within the next five years. |
In 1995, California semiconductor manufacturer Atmel Corp. was looking for a European site for its first overseas wafer fab plant. ES2's existing facilities, its trained work force of 225, and the region's enticing financial incentives persuaded Atmel to buy a majority interest in ES2 and establish operations in Rousset. Atmel was the biggest American investment in France in 1995.
From the $50 million in financial aid that Atmel received for settling in Provence, only a reported $15 million went toward the purchase of ES2. The rest was used to expand the existing facilities (Fab6) and build a 150,000 ft2 plant (Fab7), which cost $400 million and created 500 jobs. Inaugurated in early 1998, the plant can produce 5000, 200mm wafers/week, but is currently operating at 20% capacity because of depressed trading conditions. "We've put ourselves in a stand-by position, like many semiconductor producers," said Bernard Pruniaux, managing director of Atmel Rousset. "As soon as the market has recovered, we are ready to pick up where we left off. In the next few months, rather than investing in equipment that will boost our production capacity, we will focus more on technological capability and install equipment permitting 0.25- and 0.18µm technology."
Another STM alumnus, Marc Lassus, who headed the microprocesser division, moved to the nearby town of Gemenos in 1988 and created Gemplus, a leading producer of smart cards. Microchip cards are the highest-volume electronics end product, with European companies producing 76.8% of chip card revenues in 1997, said Dataquest. Smart cards represent the largest and fastest growing segment of that market. Gemplus America president Dominique Trempont said his company "offers a range of end-to-end solutions that includes cards, smart objects, software, development tools, readers, and services."
With sales of over $585 million in 1997, Gemplus stimulates the local economy in Southern France, the location of its headquarters. Gemplus not only has created 1800 direct jobs there, but also provides employment for a network of nearby subcontractors, such as Cybernetix, an electronics engineering company in Marseille that supplies equipment.
A general characteristic of the microelectronics industry in Marseille-Provence is the high level of specialized subcontracting it generates. Electronics in the region creates more jobs requiring significantly higher skills than anywhere else in France, according to the Economic Forecast and Information Bureau. To date, some 60 high-tech small- and medium-sized companies have established themselves within a radius of approximately 30 miles. The main group is centered around the two multinationals of Rousset - STM and Atmel - and specializes in the up stream segment of the semiconductor production process. Gemplus has attracted firms involved in the manufacture of micro chip cards, such as Plastiques de France. Two other diversified electronics centers have developed, one near Aix-en-Provence, the other in greater Marseille.
Since 1997, the Association Provence Microelectronic Systems (PROMES) has represented and united all the regional companies active in data transmittal and processing. Created with the support of the European Union, PROMES encourages members to pool their knowledge and resources, share research, and develop training programs. PROMES president Guy Guistini is confident that the strong local presence of firms specializing in the electronics sector (45% of companies and 41% of the workforce) will continue in the future.
Infrastructure and training
Marseille-Provence is developing the necessary infrastructure, training, and R&D to support the rapid growth of the microelectronics industry. The region's efficient road, rail, air, and sea transportation network has been reinforced by a sophisticated telecommunications service.
Microelectronic programs are offered by regional colleges and engineering schools, such as the National Engineering School of Marseille and the University of Aix-Marseille III. STU, the international university created in 1994 by STM, provides standard-setting training at all levels. Settled in a new campus near the STM plant in Rousset, STU dispenses 140,000 training hr/year to its staff of 4000. Courses are taught in English due to the group's international dimension, and are now open to other companies and organizations. This fall, for example, a new masters degree in microelectronics will welcome its first university students.
R&D is carried out both at the company level and in the universities and engineering schools, where it is often part of the training programs. Provence also has its own MIT, the Mediterranean Institute of Technology. One of the first technology institutes set up in the region, it supports scientific and technical research, private and public. In the last 10 years, it has reviewed more than 350 projects and accepted 62, of which 40% relate to microelectronics. Several laboratories of the National Center for Scientific Research are active in microelectronics research, including the Marseille Particle Physics Center and the Research Center on Crystalline Growth Mechanisms.
All these technological skills and resources were virtually unknown on an international level until quite recently. In 1993, Provence Promotion, a regional economic development agency, was created to promote the "savoir-faire" of the area. A member of the Invest in France Network, Provence Promotion has played an active part in attracting foreign investors to the Marseille-Provence region. Provence Promotion provides free and confidential assistance during every phase of an investment project.
The agency has helped to settle American companies in the region, including Applied Mechanical Europe, a subsidiary of Applied Mechanical Consulting Group of Texas; Daw Technologies; DuPont Photomasks; Watkins-Johnson Europe; and Atmel, its biggest success story.
Ester Laushway is the French correspondent for Europe magazine. she is based in Provence, ph. 33/442-924213, fax 33/442-923544.