TSMC will build a chip factory in Germany with Bosch, Infineon and NXP
TSMC will build a chip factory in Germany. The company does this in collaboration with Bosch, Infineon and NXP. The four companies are starting a joint venture for this purpose, called ESMC, or European Semiconductor Manufacturing Company.
TSMC and its partners will focus on ‘advanced’ chip production in Europe, the companies write in a statement. The planned factory, which will be located in the German city of Dresden, will produce planar fets on 28 and 22nm processes and finfets on 16 and 12nm. Construction of the factory should start in the second half of next year. TSMC hopes to start production before the end of 2027. The factory will produce 40,000 300mm wafers per month for use in automotive and industrial applications. Approximately 2,000 jobs will be created with the factory.
The joint venture, ESMC, will be 70 percent owned by TSMC. Bosch, Infineon and NXP will each own ten percent of the company. In total, more than 10 billion euros will be invested in the construction of the factory. The German government offers according to Reuters 5 billion euros in subsidy. TSMC would invest 3.5 billion euros in ESMC. The other investments come from Bosch, Infineon and NXP.
Taiwanese chipmaker TSMC said two years ago that it was considering building a chip factory in Germany. The company wants to do this to better meet the demand of its customers; TSMC produces chips for European car manufacturers, among others. TSMC delivered 1.9 million wafers to customers in the EMEA region last year, representing approximately twelve percent of TSMC’s global deliveries.
The new factory falls within the framework of the European Chips Act. The European Union recently reached an agreement on the chip law. Under the Chips Act, a total of 43 billion euros will be released for the European chip sector, largely by individual member states. Germany recently said that it is releasing a subsidy pot of 20 billion euros for the chip sector, of which TSMC will receive 5 billion euros. Intel, which plans to build several advanced chip factories in the German city of Magdeburg, will receive 10 billion.
TSMC is currently expanding in various regions. The company does this in its home country of Taiwan, but also in other regions. Many other countries and regions are keen to have chip factories on their own land due to rising geopolitical tensions between the US and China, and Taiwan and China, among others. TSMC is building 4nm chip factories in the US state of Arizona and is also planning 3nm fabs there.