The semiconductor manufacturers Global Foundries from the USA and ST Microelectronics, a Franco-Italian group, have announced the construction of a chip factory in Grenoble in south-eastern France.
The investment amounts to around 5.7 billion euros, the two companies and the French government announced on Monday.
Around 1000 new jobs would be created.
ST Microelectronics already manufactures semiconductors at the Crolles site.
According to the company, the new factory will produce chips primarily for automobile manufacturers, industry, the Internet of Things and communication networks.
Global Foundries and ST Microelectronics receive "extensive government funding".
The new plant will make a "significant contribution" to the goals of the European Union's Chips Act, the companies said.
The EU Commission passed the Chips Act at the beginning of February: It wants to boost the production of semiconductors in the EU and mobilize around 43 billion euros from public and private funds for this purpose.
The aim is to locate one fifth of global semiconductor production in Europe by 2030.
In mid-March, the US semiconductor company Intel announced the construction of two chip factories in Magdeburg.
17 billion euros are to be invested.