Taiwanese chip maker Taiwan Semiconductor Manufacturing Company is in serious and advanced talks with the German state of Saxony to build its newest factory, which will be the first European plant of the company.
(Photo : BRENDAN SMIALOWSKI/AFP via Getty Images)
Workers at TSMC Semiconductor Manufacturing Facility in Phoenix, Arizona, on December 6, 2022.
TSMC's First European Plant
Taiwan Semiconductor Manufacturing Company is now talking with authorities from Saxony, Germany as the development phase moves forward to discussing government subsidies in order for the company to build its first European plant.
According to a report from Reuters, delegations from the eastern German state with its capital in Dresden, have been going to Taiwan to discuss important matters regarding TSMC's investment. Due to higher costs associated with building the plant in Germany, the company has been discussing subsidies it could get in return for building the facility.
Decisions about building plants would be taken by the companies, as per the Saxony government. However, it was always in talks with leading companies about further investments in the region.
Chief Executive Officer C.C. Wei stated in January that the company was talking to customers and partners about building an automative-focused factory in Europe based on customer demand and the level of support from the government.
EU's Chip Efforts
The European Union has been extending its efforts to Taiwan to be its "like-minded" partner to build new plants to shore up chip supplies. Both local and national governments of Germany and Saxony are reportedly willing to give subsidies with funding support from the EU.
Aside from TSMC, Politico reported that the EU executives have also courted Intel and Samsung to build mega factories in Europe in an effort to boost Europe's market share in the semiconductor industry value chain to 20% by 2030.
EU revealed last year the European Chips Act that will ease government funding rules for semiconductor factories that had previously faced state aid restrictions. This effort comes after the bloc ties to guarantee supplies after a chip shortage and supply chain jam during the COVID-19 pandemic.
As per the state government, officials from Saxony already discussed the EU Chips Act with EU Commission President Urusal von der Leyen on March 6th in Brussels. The federal government of Germany is also willing to support and promote several projects related to semiconductor production in the country under the EU Chips Act.
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South China Morning Post reported that TSMC has been working to expand its offerings internationally as the company committed $40 billion to build a chip factory located in Arizona, United States. The company also works on building one in Japan as its second one there.
The Arizona factory will start its production in 2024 and will be using advanced 5-nanometre technology. The construction was announced after passing CHIPS Act which grants companies $54 billion in subsidies and tax credits for the industry. This easily becomes one of the largest foreign investments in the history of the United States.
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