Five billion subsidy from the federal government for domestic semiconductor production.
The construction of a factory in Dresden by the Taiwanese chip company TSMC is a done deal. This was announced by the company on Tuesday. The factory will be operated together with partners Infineon, Bosch, and NXP, each of which is to hold ten percent of the shares. TSMC wants to produce there primarily chips for the automotive industry. Construction is to begin in the second half of the year, with production starting by the end of 2027.
The German government is supporting the project with five billion euros, and according to Handelsblatt, financing is being provided by the Climate and Transformation Fund (KTF). However, final approval by the EU Commission is still pending. According to TSMC, the project is planned within the framework of the European Chips Act, a law to promote the domestic semiconductor industry. The total investment for the chip factory is expected to be ten billion euros, compared to the seven billion originally planned. Dr. C. C. Wei, CEO of TSMC, called Europe a promising place for semiconductor innovations, especially in the automotive and industrial sectors.
Crises Have Exposed the Fragility of Global Chip Supply Chains
TSMC is the world’s largest contract manufacturer of semiconductor chips, high-tech components made from materials such as silicon carbide and gallium nitride that control numerous functions in devices from cell phones to washing machines to cars. Since crises such as the Corona pandemic and the war of aggression in Ukraine have highlighted the fragility of global supply chains, Europe and the U.S., among others, sought to increase domestic production. China’s military threat to Taiwan also plays a role. Added to this are the Chinese export controls that recently came into force for the technology metals gallium and germanium, which are also used in the production of semiconductor chips.