Taiwan’s strategic move to deepen ties with Europe comes in the form of a €3.5 billion (US$3.83 billion) investment by chip giant TSMC in Germany, aimed at fostering stronger engagement between the island nation and the European Union (EU). Amid mounting pressure from Beijing regarding its sovereignty, Taiwan seeks to bolster its diplomatic standing by cultivating relationships beyond its borders.
The TSMC investment not only underscores Taiwan’s commitment to Europe but also signifies goodwill in the face of diplomatic challenges. While the EU’s reluctance to pursue a Bilateral Investment Agreement (BIA) has been evident, Taiwan’s Economy Minister, Wang Mei-Hua, emphasized the potential for enhanced cooperation between the two entities.
Minister Wang drew parallels to the flourishing collaboration between Taiwan and the United States, citing recent agreements such as the ’21st Century’ trade initiative and measures to prevent double taxation. This TSMC venture, focusing on manufacturing less advanced chips for the automotive sector, is poised to further fortify bilateral relations with Europe.
Although the proposed German plant awaits Taiwan’s approval, its strategic alignment with Europe’s technological ambitions is anticipated to surmount any potential obstacles. This investment not only underscores Taiwan’s commitment to global economic partnerships but also signals its resilience in the face of geopolitical challenges.
Amid TSMC’s autonomous investment choices, Taiwanese authorities have underlined the necessity for European nations to fortify relations with Taiwan to ensure sustained semiconductor collaboration. Taiwan’s persistent call for advancement on a Bilateral Investment Agreement (BIA) with the European Union (EU) remains unchanged.
What is the $3.83 Billion TSMC venture?
Technology giants TSMC, Bosch, Infineon, and NXP are collaborating to establish a groundbreaking joint venture aimed at advancing semiconductor manufacturing in Europe. The venture’s centerpiece is an ambitious fabrication facility (fab) projected to boast a monthly output of 40,000 300mm (12-inch) wafers.
Leveraging TSMC’s cutting-edge 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology, this initiative is poised to bolster Europe’s semiconductor ecosystem while generating approximately 2,000 high-tech jobs. Construction is slated to commence in the latter half of 2024, with production anticipated to launch by the close of 2027.
TSMC’s commanding 70% ownership stake in the joint venture underscores its pivotal role, with Bosch, Infineon, and NXP each holding 10% equity (subject to regulatory nods). The substantial investment, exceeding 10 billion euros, will be sourced from equity injection, debt financing, and robust backing from the European Union and the German government. Operational reins will be in TSMC’s capable hands, propelling Europe’s technological prowess and fostering economic resilience.
Related:
- Qualcomm might switch to TSMC & Samsung for next-gen chip, likely ditching Intel Foundry Services
- TSMC announces plans to manufacture 28/22nm and 16/12nm chips in Europe by 2027
- TSMC Arizona Plant Faces Backlash Over Hiring Taiwanese Workers
