TSMC starts building first fab in Germany alongside European partners

Taipei/Dresden, Aug. 21 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) held a groundbreaking ceremony in Dresden on Tuesday with the EU Commission president in attendance to mark the start of construction on the chipmaker's first production site in Europe.

The project, in which more than 10 billion euros (US$11.12 billion) is expected to be invested, is aimed at "strengthening Europe's semiconductor manufacturing ecosystem," TSMC said in a statement.

"With this state-of-the-art manufacturing facility, we will bring TSMC's advanced manufacturing capabilities within reach of our European customers and partners," TSMC Chairman and CEO C.C. Wei (魏哲家) said in the statement.

It "will stimulate economic development within the region and drive technological advancements across Europe," he said.

TSMC holds a 70 percent stake in the venture, known as European Semiconductor Manufacturing Company (ESMC). Robert Bosch GmbH and Infineon Technologies AG, both based in Germany, and Netherlands-based NXP Semiconductors N.V. each hold a 10 percent share, according to Reuters.

In her speech made before the groundbreaking ceremony, European Union (EU) Commission President Ursula von der Leyen lauded the benefits of the world's largest chipmaker coming to Europe.

"European industries will benefit from more reliable local supply chains, and new products that are tailored to their needs," von der Leyen said.

"And at a time of growing geopolitical tensions, TSMC will also benefit from geographic diversification to Europe, better access to our European strengths, like ... our unique single market," she said.

The EU Commission approved 5 billion euros worth of state aid for the project on Tuesday, von der Leyen said, noting that it qualified for funding under the European Chips Act because it was "a so-called first-of-a-kind facility" on the continent.

Federal Chancellor of Germany Olaf Scholz also attended the ceremony on Tuesday, writing on X (formerly Twitter) that he was "pleased that TSMC has also chosen us."

"The heart of the European chip industry beats in Dresden. Welcome, TSMC, to Saxony, Germany and Europe!" the German chancellor said.

According to TSMC's statement, ESMC will "have a monthly production capacity of 40,000 300mm (12-inch) wafers on TSMC's 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology."

The company also said the fab is expected to directly generate 2,000 "high-tech professional jobs."

Europe has long been concerned about potential disruptions to its supply of microchips, which are essential for many industries including Germany's automobile manufacturing industry.

Von der Leyen said in 2021 that Europe aimed to produce 20 percent of the global supply of wafers by 2030.

Aside from the German project, TSMC is also building capacity in the United States and Japan to diversify its production bases.

It plans to build three fabs in Arizona, two of which are currently under construction, and two fabs in Kumamoto, one of which has been completed.