Dresden is one of the most important locations for the semiconductor industry internationally. Now, with TSMC from Taiwan, an industry giant wants to settle there. The deal is only made possible by high subsidies.
The Taiwanese chip manufacturer TSMC wants to build a semiconductor plant in Dresden. The group announced this after a board meeting on Tuesday. TSMC therefore expects that the total investment will exceed ten billion euros.
The plant is to be built jointly with the Bosch, Infineon and NXP groups, each of which is said to hold ten percent of the joint venture. TSMC comes to 70 percent. According to the announcement, around 2,000 jobs will be created. The groundbreaking is scheduled for the second half of 2024. The start of production is planned for 2027.
Taiwan’s industry giant TSMC is the largest chip maker in the world
In May, the German company Infineon started building a five billion euro chip factory in Dresden. Bosch and the US company Globalfoundries also have large plants in Dresden. TSMC is the largest chip contract manufacturer in the world.
According to the “Handelsblatt”, the federal government has promised to support the construction of the TSMC factory with five billion euros – from the federal climate and transformation fund. The EU Commission must make the final decision on funding.
The planned factory construction is a project under the European Chips Act, which regulates state aid for investments in the semiconductor industry. This should boost European chip production and reduce dependency on other countries. The federal government supports the settlement of semiconductor factories with sums in the billions. With a total investment volume of 30 billion euros for a new location, Intel in Magdeburg is to receive almost ten billion from the state. Infineon is aiming for government funding of one billion euros for the expansion of its Dresden plant.
The Saxon government welcomed the decision as “good news”. Together with Intel’s decision in favor of Magdeburg and the expansion of Infineon in Dresden, this settlement will give regional development in central Germany a huge boost, explained Saxony’s state minister for regional development, Thomas Schmidt (CDU). The entire European economy will benefit. Europe must become more independent of non-European suppliers.
Geopolitical risk for the entire electronics industry
Elsewhere in Europe, too, the settlement of chip companies is being subsidized with billions – while the USA is also resorting to generous subsidies to bring semiconductor production back into the country.
TSMC masters the manufacturing processes for particularly miniaturized and economical chips and is therefore a key company for smartphone suppliers such as Apple with its iPhone. The large TSMC plants for this are at the company’s site in Taiwan – which, in view of the tensions with Beijing, is considered a geopolitical risk for the entire electronics industry.
Chips for the automotive industry usually require less modern production processes than for smartphones, for example. But with the proliferation of connected vehicles and electric cars, the industry needs more and more of them. During the pandemic, the auto industry was particularly hard hit by the shortage of semiconductors given the high demand for PCs, among other things. Several manufacturers had to temporarily suspend production.
Source: Stern
