By dpa correspondents I Tuesday, August 08, 2023
DRESDEN – Taiwanese chipmaker TSMC plans to construct a semiconductor plant in the eastern German city of Dresden with a total investment sum of €10 billion ($11 billion), the company announced after its board meeting on Tuesday.
The plant is to be built jointly with Bosch, Infineon and NXP, each of which is to hold 10% in the joint venture. TSMC will hold 70%.
TSMC said about 2,000 jobs will be created. Groundbreaking is scheduled for the second half of 2024 and production is expected to start in 2027.
The German government has agreed to help underwrite the construction costs with €5 billion from the government’s climate and transformation fund (KTF), sources tell dpa. The European Commission will have to make the final decision on the subsidy funding.
TSMC, the largest chip manufacturer in the world, plans to produce chips for the automotive industry in Dresden.
In May, the German company Infineon began construction of a €5-billion chip factory in the eastern German city. Bosch and the US company Globalfoundries also have large plants in Dresden.
The German government has promised to support the establishment of semiconductor factories with billions of euros.
Intel in Magdeburg, for example, is to receive almost €10 billion from the state for a total investment volume of €30 billion for a new location. Infineon is seeking a state subsidy of €1 billion for the expansion of its Dresden plant.
Elsewhere in Europe, too, billions are being spent to encourage chip companies to locate here – while the US is also resorting to generous subsidies to bring semiconductor production back to the country.
TSMC masters the production processes for particularly small and efficient chips and is a key company for smartphone providers like Apple. TSMC’s large plants for this are located in Taiwan – which is considered a geopolitical risk for the entire electronics industry in view of the tensions with Beijing.
Chips for the automotive industry usually require less modern production processes than for smartphones, but with the rise of smart and electric cars, the industry needs more and more of them.
During the Covid-19 pandemic, the auto industry was hit particularly hard by semiconductor shortages given the high demand for computers. Several manufacturers had to temporarily suspend production.
The project is planned under the framework of the European Chips Act, which sets a target of increasing Europe’s share of global semiconductor production to 20%.
“A robust domestic semiconductor production is of particular importance for our global competitiveness, because semiconductors keep our world running and make the transformation towards climate neutrality possible: without them, no computer runs, no car drives, neither wind nor solar plants can produce energy,” German Economy Minister Robert Habeck said following TSMC’s announcement.
