Taiwan Semiconductor Manufacturing Company (TSMC) has partnered with three key businesses to develop a semiconductor facility in Dresden, Germany.
TSMC has entered into a joint venture with Infineon, NXP Semiconductors, and Bosch to invest €100 billion ($118 billion) in constructing a semiconductor plant in the eastern German city of Dresden.
In a joint statement released on Tuesday, the companies shared that TSMC would hold a 70% stake in the proposed semiconductor facility, while Infineon, NXP Semiconductors, and Bosch would each possess a 10% stake. These shares are pending regulatory approval. TSMC is set to oversee the factory's operations.
The plant is projected to commence production by the end of 2027, focusing on automotive-grade chips and industrial-grade chips.
According to a press release on TSMC's website, the firm plans to invest up to €3.5 billion ($4.1 billion) in the subsidiary, European Semiconductor Manufacturing Company GmbH. The joint statement from the partnering companies estimates that the total investment will surpass €100 billion ($118 billion), and both the European Union and the German government have shown strong support for the endeavor.
Bloomberg reported that the German government is poised to offer subsidies of up to €5 billion ($5.9 billion) for TSMC's Dresden factory.
There were earlier reports in late May suggesting that TSMC was in discussions with the German government, seeking subsidies to cover 50% of the construction costs for the new factory in Germany.
In April, the European Union finalized a €43 billion ($50.8 billion) "chip act" aimed at increasing Europe's chip production and preventing future supply chain disruptions. Since the introduction of this legislation last year, semiconductor companies like STMicroelectronics and Infineon Technologies have announced fresh investments in Europe.
In a previous Bloomberg report, it was mentioned that the German government agreed to provide Intel with €1 billion ($1.18 billion) in aid for a new factory in Magdeburg. This move was to bolster Germany's tech industry and ensure the steady supply of crucial components.
