The European Union has recently approved substantial state aid for the construction of Taiwan Semiconductor Manufacturing Company's (TSMC) new chip plant located in Dresden, Germany. This major initiative, involving €5 billion (about $5.5 billion) of funding, is the largest aid package sanctioned under the EU's Chips Act and marks the first of its kind for Germany.
With a projected total investment of around €10 billion (approximately $11 billion), this project is significant not only for TSMC but also for the broader European semiconductor industry. It's anticipated to generate around 2,000 jobs, underscoring TSMC's commitment to bolstering semiconductor production capacity on the continent.
The establishment of this plant is seen as pivotal for Europe's technological independence, particularly amid global chip shortages. The facility will support various European industries and is especially anticipated to benefit local car manufacturers by ensuring they have reliable access to semiconductors.
This venture aligns TSMC with several prominent European firms, with the creation of the European Semiconductor Manufacturing Company (ESMC). Robert Bosch, Infineon, and NXP each hold a 10% stake, allowing TSMC to deepen connections with local clients.
TSMC’s CEO, C.C. Wei, emphasized the importance of this plant for enhancing the company's reach within Europe. He noted, 'This factory will bring us much closer to our customers here, allowing us to cater to their specific needs more efficiently.'
Production capabilities at the facility are slated to reach 40,000 300mm (12-inch) wafers per month. Utilizing TSMC’s advanced manufacturing processes, it will primarily focus on the 28/22 nanometer planar CMOS and 16/12 nanometer FinFET technologies.
A unique aspect of this project is its commitment to inclusivity; the EU stipulated conditions for the aid approval requiring ESMC to provide access to the facility for smaller firms and academic institutions. This open foundry model aims to democratize chip production, allowing any customer to place orders regardless of their affiliation with TSMC or its partners.
The plant's production will target microcontroller units (MCUs), which are widely used components across the automotive sector. Major stakeholders like Bosch, NXP, and Infineon are set to engage the facility for the manufacturing of various automotive chips.
An expanded manufacturing footprint is part of TSMC's broader strategy which includes subsidized projects not just in Europe, but also here at home and abroad, with notable expansions planned for the U.S. and Japan. The EU's €43 billion Chips Act aims to encourage semiconductor manufacturing within the region, but approvals for funding have been slow, with these recent grants being the most significant.
Intel's elaborate plans for constructing its own €30 billion plant near Magdeburg, Germany, have hit delays. The Intel facility is touted to be Europe’s leading source for advanced chip production, yet it's still pending EU approval before moving forward.
Intel representatives have stated they are actively collaborating with EU government partners to expedite their plans. With semiconductor demand projected to rise, facilities such as TSMC’s Dresden plant will be central to Europe’s ambitions of becoming self-sufficient and less reliant on imports.
Overall, the success of TSMC's new facility could set the pace for similar initiatives within the EU. It's seen as not just about job creation and investment, but also as part of a longer-term strategy to secure tech sovereignty across the continent.
