TSMC Plans To Spend $10 Billion On Chip Factory In Germany

The plans for a large chip factory of the world’s largest contract manufacturer TSMC in Germany continue to take shape. The investment volume is now tending towards a double-digit billion amount and they want to work with local partners.

Officially, the company continues to say that they are thinking about building a plant in Europe. Behind the scenes, on the other hand, things are much further along, as a recent report by the US news service Bloomberg shows. Sources familiar with the matter have said that the construction project is expected to cost at least 7 billion euros, but the total investment will probably be closer to 10 billion euros.

The location of the new plant will most likely be in Saxony – so TSMC is docking onto the semiconductor region around Dresden. In view of the partners with whom one wants to realize the plant, this is also logical: the Taiwanese do not want to build alone but work together with NXP, Bosch, and Infineon, all of which are already settled in the vicinity of the site.

Chips designed for cars

TSMC Chairman Mark Liu had previously told shareholders in 2021 that the chipmaker had begun examining building a manufacturing facility in Germany, Europe’s largest economy. The planned European plant will focus on chips for the automotive sector. However, this also means that TSMC will not use its high-end processes in this country, but rather rely on well-hung 28-nanometer designs.

In view of the subsidy programs that are being launched worldwide for the semiconductor industry, the TSMC consortium is of course also speculating on state aid. It is still unclear how high these losses will be. However, the negotiations are said to be already underway at various levels. It is to be expected here that the federal government, the EU and probably also the state of Saxony will each take on certain services in order to realize the work.