Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in talks with partners to spend as much as 10 billion euros (US$11 billion) to build a chipmaking fab in Saxony, Germany, people familiar with the matter said.
The planned venture between TSMC, NXP Semiconductors NV, Robert Bosch GmbH and Infineon Technologies AG would include state subsidies and would have a budget of at least 7 billion euros, with the total investment likely closer to 10 billion euros, the people said, asking not to be identified because the information is private.
A final decision has not been made and the plans could still change, they said.
Photo: Lam Yik Fei, Bloomberg
TSMC is still evaluating the feasibility of building a plant in Europe, spokeswoman Nina Kao (高孟華) said, without elaborating.
Spokespeople for NXP, Bosch, Infineon and the German Ministry for Economic Affairs and Climate Action declined to comment on the project.
TSMC chairman Mark Liu (劉德音) told shareholders in 2021 that the firm had started assessments on setting up manufacturing operations in Germany, Europe’s largest economy.
The proposed European plant would focus on chips for the automotive sector, TSMC chief executive C.C. Wei (魏哲家) has said.
Similar projects in Germany have sought as much as 40 percent of their funding from subsidies as the EU attempts to double its share of global semiconductor production by 2030.
Last month, the EU passed the 43 billion euros Chips Act to boost domestic output after supply chain disruptions during the COVID-19 pandemic, and as tensions between the US and China escalate.
Any state aid would require approval from the European Commission, and the consortium is in talks with officials over the size of the package, the people said.
In Japan, where TSMC is spending US$8.6 billion with partners to build a plant, it would receive about half of the funding from the government.
The German facility, which TSMC could approve as soon as in August, would focus on producing 28-nanometer chips, some of the people said. If built, it would be the company’s first fab in the EU.
On Tuesday, Infineon broke ground on a semiconductor fab in Dresden, a city in Saxony that also hosts production facilities for GlobalFoundries Inc and Bosch.
Chipmakers tend to build plants in clusters, so that the expensive facilities can take advantage of infrastructure and workers that are already there.
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