The Taiwanese electronic chip giant TSMC on Tuesday gave the green light to the establishment of its first European factory in Dresden, in eastern Germany, a project of more than ten billion euros which will strengthen the continent in this strategic industrial sector.

The board of directors of the group, the world’s largest manufacturer of semiconductors, formalized the decision expected for months, announcing in a press release that the Taiwanese company would invest nearly 3.5 billion euros in the future factory.

TSMC will hold 70% of the project and will collaborate with three European partners, the Dutch NXP and the Germans Infineon and Bosch, involved up to 10% each.

“Total investments are expected to exceed 10 billion euros in the form of equity, loans and strong support from the European Union and the German government”, detail in a press release the four partners.

Welcoming this announcement, German Chancellor Olaf Scholz welcomed the fact that Germany is now becoming “the main place of production of semiconductors in Europe”.

This is important for the “future viability of our European continent and it is particularly important, of course, for the future viability of Germany”, he added.

This is TSMC’s first factory in Europe, as Western countries strive to tighten their control over the manufacture of these crucial components to produce everything from laptops to cars to missiles. .

Tensions with China over Taiwan, where TSMC is based, have heightened concerns around the global supply of microchips.

The Covid-19 pandemic, by paralyzing supply chains in 2020, has also highlighted the dependence on Asian suppliers by causing major shortages of chips to the point of putting the automotive industry in difficulty, a shock for the ‘Europe.

The German factory of the Taiwanese giant will also specialize in the production of semiconductors for the automotive sector engaged in a historic change towards electrical technologies.

“Europe is a very promising place for innovation in semiconductors, especially in the areas of automotive and industry,” said Che Chia Wei, CEO of TSMC, in a joint statement from the four. partners.

The objective is to launch the construction site in the second half of 2024 for a start of production by the end of 2027. The factory should have a monthly production capacity of 40,000 300 mm silicon wafers, one of the most advanced technologies . Some 2,000 direct jobs are to be created.

The German state should grant some five billion euros in subsidies to the project, according to several German media.

The EU, which wants to boost chip production on the Old Continent by 2030 to capture 20% of the world market, decided this year to mobilize 43 billion euros in public and private investment through a “Chips Act “.

TSMC’s announcement shows the “Chips Act in motion, it strengthens Europe’s security of supply”, welcomed on X (formerly Twitter) European Commissioner for Industry Thierry Breton.

Germany wants to be the spearhead of this relocation movement, especially as Europe’s leading economy, whose growth has stalled, is seeking to secure the foundations for an industrial revival.

This investment “shows that Germany is an attractive and competitive location, especially when it comes to key technologies such as microelectronics,” said Economy Minister Robert Habeck in a separate statement.

-“Silicon Saxony” –

The Dresden region, in the former East Germany, is one of the strongholds of microelectronics in Europe, to the point of being nicknamed for many years the “Silicon Saxony”.

Berlin announced in mid-June to increase to nearly 10 billion euros the subsidy to the American semiconductor giant Intel, which is building a new factory in Magdeburg (center-east).

In addition to Intel, Germany’s Infineon recently kicked off construction of a new semiconductor factory in Dresden ?a 5 billion euro project?, and America’s Wolfspeed announced a major investment in western Germany .

Most of TSMC’s production is based in Hsinchu, northern Taiwan, but the group is expanding its global business with a planned factory in Arizona, which is one of the biggest foreign investments in the United States.

This is delayed until 2025 due to difficulties in recruiting skilled workers in the United States, a concern that also concerns Germany where the labor shortage is particularly acute.

08/08/2023 18:33:14 –         Taipei (AFP) –         © 2023 AFP