Capacity Expansion: TSMC Reportedly Before Factory Construction in Germany

Image: TSMC

The rumor of recent years is alive again: According to media reports from Asia, the construction of the TSMC factory in Germany is almost certain. TSMC does not comment on these statements, the manufacturer is already in the so-called calm periodtitled in German wooden trade embargo, before the quarterly results.

Germany has good opportunities as a location

Germany was last seen as TSMC’s favorite, although the TSMC boss always emphasized that negotiations were still ongoing. The international community in Europe is trying EU Chips Act to bring top companies to the region to achieve the ambitious goal of once again being responsible for approximately 20 percent of global semiconductor production.

Germany has a good chance here. Intel was one of the first companies to jump on this last year. Speaking to journalists last week, Pat Gelsinger explained that negotiations on the details of the Magdeburg plants are in the final stages and should be concluded soon. According to the data available to date, Intel will receive a minimum of 40 percent funding and plans to begin construction in the first half of 2023.

Now or never!?

Ultimately, it may also be a matter of time that forces TSMC into action. Because the previous EU Chips Act yields only EUR 43 billion and would be quickly used up if only a handful of major projects were started up. Industry representatives are therefore already demanding a much larger amount, otherwise the goal of 20 percent market share is doomed from the start. At an event organized by Globalfoundries, which will also expand in Europe through the EU Chips Act, NXP boss Sievers mentioned an amount of 500 billion euros that would be needed to land there.

Germany therefore launched an extra package in the spring to attract chip manufacturers. TSMC recently stated that it would only decide whether it makes sense to build a factory there based on the customer’s wishes in the region. Ultimately, though, it has to be the combination of both plus other factors. However, after a new building in the US and Japan, Europe would be one of the missing links at TSMC – after all, sales in Europe are just ahead of Japan.

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