TSMC wants to build a €10 billion chip manufacturing plant in Germany

In context: The recently approved EU Chips Act should provide a lot of money for companies willing to invest and create new development opportunities in the Old Continent. These firms likely include TSMC, which is seemingly already in talks with Europe’s largest economy to build a new chip manufacturing fab.

Working together with NXP Semiconductor, Bosch, and Infineon, TSMC is planning a new chip fab to be built in the Free State of Saxony, one of the sixteen regions of the Federal Republic of Germany. The initial budget for the new venture would be “at least” €7 billion, while the overall investment would likely be closer to €10 billion.

According to unnamed sources familiar with the matter, the Taiwanese chip foundry is still talking with its potential partners, the German government, and local authorities, and final plans could be subject to change. The new facility could be approved as soon as August, the sources said, and it would be TSMC’s first manufacturing plant built in Europe.

In recent years, TSMC said it was considering building a chip plant in Germany, and that it was in “advanced talks” with local authorities about the all-important funding matter. The EU Chips Act, which will invest €43 billion to boost Europe’s semiconductor industry, likely was a convincing motivation to push these talks further.

The new German plant would be employed to make 28-nanometer chips, while TSMC is still keeping cutting-edge manufacturing processes at home, in Taiwan. For the already approved facility being built in Arizona, the corporation is planning to produce 4nm semiconductors in 2024 before adopting an even more advanced node (3nm) at a later date.

Any new funding for chip manufacturing plants in Germany would need official approval from European authorities, while TSMC and the other companies are seemingly trying to squeeze more money from public officials. In Japan, TSMC is investing $8.6 billion in a new chip plant, and half of that sum will come directly from Tokyo’s government.

The Taiwanese giant isn’t the only chip manufacturer interested in building new plants in Germany, as Infineon is spending an additional €5 billion for a manufacturing fab in Dresden. The Saxon city already hosts production facilities for GlobalFoundries and Bosch. Meanwhile, Intel has delayed the start of a major manufacturing project in Germany while asking for more funds.