TSMC, the world’s largest chipmaker, is considering building its first European plant in Dresden, Germany. The plant, which could begin construction in 2024, would meet the growing demand for locally-manufactured chips from Europe’s car industry. A team of senior executives from TSMC will visit Germany in the new year to discuss government support and the local supply chain’s capacity to meet the company’s needs.
A final decision on whether to invest billions of dollars in the plant will be made soon after the visit. TSMC is in talks with several materials and equipment suppliers to determine if they can invest in the company’s proposed chip plant in Dresden, Germany. If the plant is built, it will focus on producing 22-nanometer and 28-nanometer chips using over 50 types of equipment and more than 2,000 materials, such as chemicals and industrial gases.
These chip technologies will be similar to those that TSMC plans to make at a factory in Japan with Sony. Nanometers refer to the size of the transistors on a chip, with smaller nanometers indicating more advanced and powerful semiconductors. As global chipmakers like Intel and Samsung expand their capacity, TSMC is considering entering the European market. The three largest chipmakers in the world have committed to investing at least $380 billion over the next decade to build new factories in Taiwan, South Korea, the US, Japan, Germany, Ireland, and Israel.
The Chips Act, passed by Congress in the US last year, has attracted around $200 billion in private investment in the country’s chipmaking capacity, according to the Semiconductor Industry Association. The rapid expansion of the semiconductor industry has raised concerns that there could be an excess supply of chips if the global economy experiences a significant slowdown. However, market research firm Mordor Intelligence predicts that the global semiconductor market will grow at a rate of around 6% per year between 2021 and 2025, indicating that demand for chips is likely to remain strong.
Taiwan Semiconductor Manufacturing Company’s (TSMC) decision to build a plant in Dresden would be beneficial for the European Union, which is trying to reduce its reliance on importing semiconductors from Asia. The EU approved 43 billion euros in subsidies in 2021 to encourage chipmakers to locate in Europe.
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(source)
