Shulou(Shulou.com)11/24 Report--

CTOnews.com March 16 news, Reuters said that TSMC and Dresden, Saxony, Germany (Dresden) on the construction of a new plant negotiations have entered a late stage, the current negotiations between the two sides focus on government subsidies to support investment

TSMC, the world's largest contract chipmaker and Asia's most valuable listed company, said in 2021 that it was in the early stages of assessing the possibility of building a plant in Germany. If nothing happens, this will be its first European factory.

As far as CTOnews.com knows, Dresden already has a complete semiconductor production chain and supply ecosystem, and TSMC can get EU subsidies to build a plant here and get closer to customers geographically.

According to public information, Dresden is the largest semiconductor center in Europe, including Infineon, Bosch, Lattice, X-Fab, NXP and other enterprises have set up wafer factories, and applied materials, ASML, Siltronic Electronic Materials (Siltronic) are also fully supported locally, semiconductor-related employment has reached more than 50,000 people.

Taiwan's Industrial and Commercial Times also reported a few days ago that TSMC has chosen to set up a plant in Dresden and is expected to start production in 2025 in response to strong local demand for mature special processes in Europe. TSMC expects overseas capacity to account for more than 20 per cent of 28nm and more advanced processes in five years' time.

A person familiar with the matter told Reuters that the talks between TSMC and Saxony were "serious and in-depth" and that the delegation from Dresden, the capital of the eastern German state, had held talks with TSMC for a long time. The person, who spoke on condition of anonymity, said TSMC had been discussing subsidies for building factories, given the high costs associated with building factories in Germany, including labour costs.

In January this year, Wei Zhijia, CEO of TSMC, said that he was discussing with customers and partners to build a factory centered on automotive semiconductors in Europe based on customer needs and government support. The German and Saxony state governments are willing to provide subsidies to TSMC, but they need more EU funds, a second person familiar with the matter said. "without subsidies, no one would have come at all," the source added.

TSMC declined to comment, while the Saxony state government said it would be up to the company to decide whether to build the plant, but added that it had been in talks with industry-leading companies about further investment in the region.

According to the Saxony state government, government officials discussed the EU chip bill with European Commission President Ursula von der Lane in Brussels on March 6. The German Ministry of Economics said it could not comment on individual companies' plans, but noted that the federal government was willing to support and promote semiconductor production projects under the European Chip Act.

Trapped by global geopolitical risks, TSMC has been forced to build new factories outside China, promising to build a $40 billion chip plant in Arizona, while building one in Japan and considering a second one there.

According to public information, TSMC's Arizona plant will start production in 2024 and will adopt advanced 5nm technology. Today, a person familiar with the matter said that if TSMC's German plant can proceed smoothly, they may only produce less advanced chips, especially those used in the automotive industry. But "these are the chips that German industry needs," he added.

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