Taiwanese chipmaker TSMC on Tuesday committed $3.8 billion to building a factory in Germany, its first in Europe. The company gained state support for the $11 billion plant as the continent seeks to bring supply chains closer to home.
Germany has been courting the world’s largest contract chipmaker since 2021. It will contribute up to $5.4 billion to the factory in Dresden, capital of the eastern state of Saxony, note German officials.
The plant will be TSMC’s third outside of traditional manufacturing bases in Taiwan and China. It’s central to Berlin’s ambition to foster the domestic semiconductor industry, according to Reuters.
The European Union approved the European Chips Act, a $47 billion subsidy plan to double its chipmaking capacity by 2030. That’s a bid to catch up with Asia and the United States after shortages and high prices during the COVID-19 pandemic created havoc for manufacturers.
“Germany is now probably becoming the major location for semiconductor production in Europe,” said German Chancellor Olaf Scholz. This is less than two months after Intel announced a $32.8 billion plan to build two chip-making plants in the country, Inside Towers reported.
TSMC is also investing $40 billion in a new plant in Arizona, supporting Washington’s plans for more chip making at home, Inside Towers reported. TSMC said after a board meeting that approved the German investment that it approved a capital injection of up to $4.5 billion (out of the total $40 billion) for the Arizona plant. TSMC is also building a plant in Japan in a joint venture with Sony, according to Reuters.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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