GlobalFoundries criticizes Germany for subsidizing TSMC and thinks it deserves more support

Taiwan Semiconductor Manufacturing Company (TSMC) recently declared that its board of directors has endorsed plans to establish a semiconductor factory in Germany. This venture will be a collaborative effort with Bosch, Infineon, and NXP Semiconductors, leading to the foundation of the European Semiconductor Manufacturing Company (ESMC) located in Dresden, Germany. The intention is to provide cutting-edge semiconductor manufacturing services. TSMC is poised to secure a commanding 70% equity stake in this joint venture, while Bosch, Infineon, and NXP Semiconductors will each hold a 10% share.

Contemporary media sources illuminate that GlobalFoundries has expressed opposition to the German government’s subsidization of TSMC, arguing it would amplify TSMC’s already dominant position in the wafer foundry sector. From GlobalFoundries’ perspective, these substantial subsidies TSMC receives are discordant with European laws. Saam Azar, in charge of governmental and legal affairs at GlobalFoundries, stipulated that once the German government and TSMC officially register the project in Brussels, there might be a formal grievance lodged with the European Commission.

TSMC’s proposed new facility, a 300mm wafer fab, will utilize the 22/28nm planar CMOS and 12/16nm FinFET fabrication techniques. The factory is anticipated to have a monthly output of 40,000 wafers, with construction set to commence in the latter half of 2024 and production beginning by the close of 2027. The total investment for this endeavor is expected to exceed 100 billion euros, with subsidies from the European Union and the German government reaching up to 50 billion euros—constituting approximately half the total cost.

GlobalFoundries is fervently lobbying the German government for similar support. The rationale is that its wafer fabrication plant in Dresden, originating from AMD, has been operational for a quarter of a century. The aid it has garnered over these years is markedly less than what’s earmarked for TSMC’s nascent project. As these fabs, inherited from AMD, constitute a pivotal element of the semiconductor industry in the Dresden region, GlobalFoundries firmly believes it is rightfully deserving of governmental assistance.