TSMC has broken ground on its billion dollar factory in Germany, which will primarily produce chips for the automotive and industrial sectors. German Prime Minister Wolfgang Scholtz and European Commission President von der Leyen attended the opening ceremony of the plant on Tuesday.
Scholz pointed out that Germany relies on semiconductors to develop sustainable technologies for the future, but Germany cannot rely on semiconductor production in other parts of the world. The TSMC factory in Dresden is one of Europe's efforts to construct its own supply chain.
It is reported that the total cost of TSMC's German factory is as high as 10 billion euros, of which about half of the funds are subsidized by the German government. Germany's goal is to lead the European Union region to achieve the goal of producing one-fifth of the world's semiconductors by 2030.
TSMC will establish a joint venture company ESMC with Infineon Technologies, NXP Semiconductors, and Bosch AG, with TSMC holding 70% of the shares and the remaining three companies holding 10% each.
There are joys and sorrows
Germany is the largest supporter of the European semiconductor industry, and the German government has planned to invest 20 billion euros to support its domestic chip production, including providing subsidies for TSMC factories and the Intel factory to be built in Magdeburg.
Von der Leyen pointed out that the European Commission has approved the German government to provide 5 billion euros of government assistance to TSMC factories, and said that this project is a real win-win: European chip companies will gain new technology and production capacity, thus benefiting the entire European industry; TSMC will benefit from the geographical diversification of the European market, better utilizing the automotive industry in Europe and exploring new markets.
The TSMC factory is the fourth large-scale project to receive funding under the EU's 2023 semiconductor program. Previously, the EU provided € 292.5 million and € 2 billion for two projects in Italy, and € 2.9 billion for another project in France.
In contrast, the Magdeburg project that Intel has been promoting is significantly behind schedule. The project was originally planned to invest 33 billion euros, of which 10 billion euros came from government aid, but the EU has not yet approved this financial subsidy. In addition, Intel's second project to invest in Poland has also encountered resistance at the EU level.
The European Commission announced on Tuesday that it is in discussions with the governments of Germany and Poland on how to provide financial support for Intel. At the same time, Intel's financial issues, particularly its Q2 earnings report's $1.6 billion loss, have raised concerns in the market about its international projects.