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Billion-dollar project in Dresden: TSMC builds a chip factory in Saxony together with Bosch, Infineon and NXP
Photo: Ann Wang / REUTERS
The billion-dollar settlement of the Taiwanese chip company TSMC in Dresden is a done deal. TSMC will build a chip factory in Dresden together with partners Bosch, Infineon and NXP, the company announced on Tuesday after a "board meeting". The management committee had given the green light for the investment. The investment sum is expected to be at least ten billion euros. TSMC is the largest chip contract manufacturer in the world.
The federal government wants to support the construction of the factory with five billion euros. The money is to come from the Federal Government's Climate and Transformation Fund. However, the final decision on funding must be made by the EU Commission.
TSMC wants to produce chips for the automotive industry in Dresden. TSMC is not alone with its expansion plans in Germany: The German government has already approved a subsidy of almost 30 billion euros for the planned chip plant of the US company Intel in Magdeburg with a volume of 10 billion euros. TSMC competitor Global Foundries is also considering expanding production in Germany.
2000 jobs, start of production in 2027
According to TSMC's announcement, about 2000 jobs are to be created. The groundbreaking ceremony is scheduled for the second half of 2024. Production of the chip plant is scheduled to start in 2027.
It was only in May that the German company Infineon began construction of a five-billion-euro chip factory in Dresden. Infineon is seeking government funding of one billion euros for the expansion of its Dresden plant. Bosch and the U.S. company Globalfoundries also maintain large plants in Dresden.
Worldwide subsidy race
Elsewhere in Europe, billions are also being used to promote the settlement of chip companies, while the US is also resorting to generous subsidies to bring semiconductor production back into the country.
TSMC has mastered the manufacturing processes for particularly miniaturized and economical chips, making it a key company for smartphone vendors such as Apple with its iPhone. The large TSMC plants for this are located at the company's site in Taiwan – which is considered a geopolitical risk for the entire electronics industry in view of the tensions with Beijing.
Chips for the automotive industry usually require fewer modern production processes than for smartphones, for example. However, with the spread of connected vehicles and electric cars, the industry needs more and more of them. During the pandemic, the auto industry was hit particularly hard by the semiconductor shortage, given the high demand for PCs, among other things. Several manufacturers had to temporarily suspend production. Germany wants to prevent such a scenario in the future by promoting chip plants in Germany.
TSMC will hold a 70 percent stake in the planned joint venture. The other partners Bosch, Infineon and NXP are each participating ten percent in the joint project. The project is an important step in bringing the production of the latest generation of semiconductors to Europe, TSMC and Bosch emphasized.
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