TSMC will officially approve the construction of a factory in Germany this week

Previous reports have stated that Taiwan Semiconductor Manufacturing Company (TSMC) has established a model for constructing a factory in Germany, collaborating with Bosch, the world’s largest automotive parts supplier, to build a new wafer fab in Dresden. With an investment of approximately 10 billion euros, they will employ a specialized 28nm process geared towards automotive chips. In addition to Bosch, TSMC will also partner with NXP Semiconductors and Infineon to provide a wide foundation for the wafer fab, thereby diversifying the investment risk.

According to Reuters, TSMC’s board of directors will officially approve the construction of the German factory this Tuesday, while the local government has agreed to provide a total subsidy of 5 billion euros. TSMC has been evaluating local factory construction since 2021 and has discussed relevant matters with the government of the Free State of Saxony. It is anticipated that details about government subsidies will be revealed once TSMC’s board approves the joint venture scheme.

Up until now, neither TSMC nor the German government have officially confirmed any plans for factory construction. However, TSMC has previously stated its intention to construct a wafer fab in the region that will produce microcontrollers. It is understood that Bosch will assume responsibility for aspects such as manpower, labor unions, and production efficiency, while NXP Semiconductors and Infineon will assist TSMC in planning and raising government subsidy funds, securing local government policy benefits in areas such as water, electricity, land, and tax reductions.

In an effort to attract investment in the technology sector and implement a strategy for semiconductor autonomy, the European Commission has also greenlighted subsidies for relevant countries. With such substantial subsidies, the plans of TSMC and its partners are unlikely to be refused.