TSMC is bringing a €10bn chip plant to Germany

8 Aug 2023

Image: © Maksim Shmeljov/Stock.adobe.com

The new joint venture will be 70pc owned by TSMC and is expected to produce 40,000 wafers per month when fully operational.

Taiwanese semiconductor giant TSMC has entered a joint venture with Bosch, Infineon and NXP to build a wafer fabrication plant in Germany.

The goal is to begin construction of the facility in the second half of 2024  and to begin production by the end of 2027. The facility is expected to create roughly 2,000 high-tech jobs and produce 40,000 wafers per month when fully operational.

The new joint venture will be 70pc owned by TSMC, while Bosch, Infineon and NXP will each own 10pc of the equity. The Taiwanese company said the investments into this venture are expected to exceed €10bn.

TSMC said the venture is being supported by the EU and the German government. Germany is expected to provide €5bn to support the factory, while TSMC is expected to provide roughly €3.5bn, Reuters reports.

The company said this new venture is planned under the framework of the Chips Act, the landmark piece of EU regulation that aims to increase the bloc’s share of global chip production from 10pc to at least 20pc by the end of the decade.

This act includes a framework to attract investment and enhance production capacities in semiconductor manufacturing, in order to protect Europe’s supply chain. The €43bn act was adopted last month after the European Council approved the regulation.

“This investment in Dresden demonstrates TSMC’s commitment to serving our customers’ strategic capacity and technology needs, and we are excited at this opportunity to deepen our long-standing partnership with Bosch, Infineon and NXP,” said TSMC CEO Dr CC Wei.

“Europe is a highly promising place for semiconductor innovation, particularly in the automotive and industrial fields, and we look forward to bringing those innovations to life on our advanced silicon technology with the talent in Europe.”

The global economy faced a shortage in semiconductors from 2021 onwards due to the Covid-19 pandemic, which led to global lockdowns, factory shutdowns and severe disruptions to supply chains. That year, TSMC said it would invest $100bn into expanding its manufacturing capacity over a three-year period to address this global shortage.

Earlier this week, the Tyndall National Institute called on Ireland’s Government to utilise the potential opportunities presented by the EU Chips Act.

Experts also say the sector requires more talent. Earlier this year, Peter Kennedy, professor of microelectronic engineering at University College Dublin told SiliconRepublic.com spoke about the importance of Ireland staying ahead on this front.

“To continue our leadership in semiconductors, we need a steady supply of electronic engineering graduates at master’s level and doctoral level who are the best in the world at what they do, in design, manufacture and applications,” Kennedy said.

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Leigh Mc Gowran is a journalist with Silicon Republic