TSMC Plans Chip Factory in Germany

by Warren Seah

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip maker, has announced its plans to construct a factory in Dresden, Germany, as part of a joint venture with European companies. With investments exceeding 10 billion euros ($11 billion), this venture represents another significant investment for Europe, as Brussels aims to enhance its self-sufficiency in semiconductor production.

TSMC has formed a joint venture with Infineon Technologies, Robert Bosch, and NXP Semiconductors to develop a state-of-the-art chip factory that caters to the growing demand in the automotive and industrial sectors. The total investments, which include equity injections, debt borrowing, and support from the European Union and German government, amount to more than EUR10 billion. Nevertheless, TSMC has indicated that the final decision on this investment will depend on the level of public funding provided for the project.

Highlighting the potential of Europe’s semiconductor industry, TSMC Chief Executive C.C Wei stated, “Europe is a highly promising place for semiconductor innovation, particularly in the automotive and industrial fields.”

Under this joint venture, TSMC will have a 70% stake in the venture called European Semiconductor Manufacturing Co., while the three European companies will retain 10% stakes each. TSMC will manage the plant, with construction scheduled to commence in the second half of 2024, and production expected to begin by the end of 2027. It is estimated that this facility will create approximately 2,000 high-tech professional jobs.

This announcement follows closely after Intel’s agreement with Berlin to invest over EUR30 billion in two semiconductor facilities in Germany. In addition, Intel has plans for a new semiconductor assembly and testing facility in Poland, investing up to $4.6 billion. Already hosting Intel’s largest research-and-development facility in Europe with almost 4,000 employees, Poland continues to be a strategic location for the company.

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