The Taiwanese chip manufacturer TSMC wants to build a semiconductor factory in Dresden. The group announced this on Tuesday after a board meeting. TSMC therefore expects the total investment to exceed 10 billion euros.
The factory will be built jointly with the Bosch, Infineon and NXP groups, each of which would own 10 percent of the joint venture. TSMC comes in at 70 percent. About 2,000 jobs will be created, according to the announcement. The groundbreaking is scheduled for the second half of 2024. The start of production is planned for 2027.
In May, the German group Infineon started construction of a 5 billion euro chip factory in Dresden. Bosch and the American company Globalfoundries also have large factories in Dresden. TSMC is the largest chip contract manufacturer in the world.
Five billion euros in financing
According to the “Handelsblatt”, the German federal government has pledged to support the construction of the TSMC plant with 5 billion euros – from the federal climate and transformation fund. The European Commission must take the final decision on funding.
The German government supports the establishment of semiconductor factories with amounts in the billions. With a total investment volume of 30 billion euros for a new location, Intel in Magdeburg receives almost 10 billion euros from the state. Infineon is seeking government funding of €1 billion to expand its factory in Dresden.
Elsewhere in Europe, the establishment of chip companies is also being subsidized with billions – while the US is also resorting to generous subsidies to get semiconductor production back into the country.
Technology leader in microchips
TSMC controls the production processes for highly miniaturized and economical chips and is therefore an important company for smartphone suppliers such as Apple with its iPhone. The large TSMC factories for that are at the company’s location in Taiwan – which is seen as a geopolitical risk for the entire electronics industry given the tensions with Beijing.
Chips for the automotive industry usually require less modern production processes than for smartphones, for example. But with the proliferation of connected vehicles and electric cars, the industry needs more and more. During the pandemic, the automotive industry was hit particularly hard by the shortage of semiconductors, partly due to the high demand for PCs. Several manufacturers had to temporarily stop production.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
