Taiwanese TSMC accepts $3.8 bln Germany microchips factory plan
2 Min Read
The board approves a $3.8 billion investment for the construction of its first European factory, in Germany.
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The photo showing the icon of TSMC during the Taiwan Innotech Expo at the World Trade Center in Taipei, Taiwan, on October 14, 2022. (AP)
Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW) said on Tuesday that its board had approved a 3.5-billion euro ($3.8 billion) investment for the construction of its first European factory, in Germany.
TSMC has been since 2021 in discussions with the German state of Saxony about constructing a manufacturing facility, or "fab," near Dresden.
The facility, which will be TSMC's third outside of the traditional production hotspots of Taiwan and China, is essential to Berlin's goal of developing the local semiconductor industry.
Read: Taiwan chipmaker TSMC shares dip by 3.3% after revenues dropped 10%
The corporation approved the investment of up to 3.499 billion euros into a subsidiary, European Semiconductor Manufacturing Corporation (ESMC) GmbH, of which it would hold 70%, to supply foundry services, according to a brief statement released following a board meeting.
The German semiconductor companies Bosch and Infineon and the Dutch company NXP will each own 10% of the facility, which can produce 40,000 300-millimeter wafers per month. It's scheduled to debut in 2027.
In an effort to catch up with Asia and the United States, the European Union has passed the EU Chips Act, a 43 billion euro subsidy plan to multiply by two its chipmaking capacity by 2030.
TSMC is one of many chipmakers attempting to obtain government support to construct plants in Europe, including Intel (INTC.O) and Wolfspeed (WOLF.N).
By paying billions in state subsidies, Brussels and EU member states are encouraging domestic manufacture in an effort to reduce reliance on Asian suppliers and alleviate a global chip shortage that has caused major problems for the auto industry.
By 2030, the bloc wants to have a 20% market share worldwide.
To support Washington's aspirations for expanding domestic chip production, TSMC is also investing $40 billion in a new plant in the western US state of Arizona. The company currently runs a plant in Japan under a joint venture with Sony.
As part of the overall $40 billion investment, TSMC said in a statement following the board meeting that it had also approved a capital infusion of no more than $4.5 billion for the Arizona factory.
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