TSMC in advanced talks with Germany for new chip plant supported by government subsidies after Europe eased rules
- Taiwan Semiconductor Manufacturing Co is in ‘serious and advanced’ talks with Saxony about subsidies for its first European plant, sources told Reuters
- The European Union last year unveiled the European Chips Act to ease government funding rules for semiconductor plants that had previously faced state aid bans
TSMC, the world’s largest contract chip maker and Asia’s most valuable listed company, flagged in 2021 that it was in the early stages of reviewing a potential expansion into European Union member Germany, in what would be its first plant in the continent.
The EU last year unveiled the European Chips Act to ease government funding rules for semiconductor plants that had previously faced state aid bans, as the bloc tries to guarantee supplies after a chip shortage and supply chain bottlenecks during the Covid-19 pandemic.
One person briefed on the matter said talks between TSMC and Saxony are “serious and advanced”, and delegations from the eastern German state with its capital in Dresden have been coming to Taiwan for talks with TSMC.
Given the higher costs associated with building in Germany, including for labour, TSMC has been discussing subsidies it could get in return for building the factory, said the person, who declined to be identified because the talks are private.
TSMC said in December that there was “no concrete plan” to build a chip factory in Germany.
In January, TSMC chief executive C C Wei said the company was talking to customers and partners about building an automotive-focused plant in Europe, based on customer demand and the level of government support. TSMC declined to comment further.
The EU has been courting Taiwan as one of the “like-minded” partners it would like to work with to build new plants to shore up chip supplies.