Taiwanese chipmaker TSMC has committed 3.5 billion euros ($3.8 billion) to a factory in Germany, marking its first venture in Europe. The move comes as Europe aims to strengthen its supply chains and support its car industry. The European Union has approved the European Chips Act, a 43 billion euro subsidy plan to double chipmaking capacity by 2030. Germany will contribute up to 5 billion euros to the factory in Dresden, which is set to become a major location for semiconductor production in Europe. TSMC’s investment is the largest in Saxony’s history and a boost for the state premier.
German Chancellor Olaf Scholz emphasized the importance of Germany’s role in semiconductor production for the resilience and future viability of the country and Europe as a whole. Saxony, known for its electronics industry, already has several chip “fabs” and a tradition of precision craftsmanship. TSMC’s investment in Germany is seen as a vote of confidence in the German economy, which has faced challenges due to high energy prices and fears of deindustrialization. The investment is expected to create an ecosystem for semiconductor manufacturing in Germany and generate orders for various sectors.
TSMC is also investing $40 billion in a new plant in Arizona and building a plant in Japan in a joint venture with Sony. The company has approved a capital injection of up to $4.5 billion for the Arizona plant. Overall, TSMC’s investments reflect a global trend of countries seeking to strengthen their semiconductor industries and reduce reliance on foreign supply chains.
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