In a significant stride towards enhancing Europe’s semiconductor production capabilities, the Taiwan Semiconductor Manufacturing Company (TSMC) has announced its collaboration with Bosch, Infineon, and NXP to establish a major semiconductor plant in Dresden, Germany. The plant, operating under the moniker “European Semiconductor Manufacturing Company” (ESMC), aims to cater to the growing demands of the automotive and industrial sectors. The joint venture’s formation signifies a pivotal step in fostering European semiconductor innovation, supported by a substantial investment of approximately €10 billion.
The consortium anticipates commencing the construction of the Dresden facility in the latter half of 2024, with production slated to commence by the close of 2027. TSMC will hold a 70% stake in the joint venture, while Bosch, Infineon, and NXP will each possess a 10% share. The finalization of this investment endeavor hinges on the confirmation of public funding levels, a decision that TSMC elaborates upon.
The planned facility will bear resemblance to TSMC’s acronym, aptly named ESMC. This establishment is envisaged to facilitate the realization of a 300mm manufacturing facility, poised to meet the burgeoning capacity requisites of the swiftly expanding automotive and industrial domains. The substantial €10 billion investment will encompass contributions from equity, debt, and subsidies from both the European Union and the German government.
Acknowledging the potential of this venture, the Federal Ministry of Economics and Technology has signaled its support, subject to approval from the EU Commission and compliance with the European Chips Act’s criteria for national funding procedures. With TSMC’s investment decision locked in, the formal procedures for state aid and subsidies can proceed apace. Sources indicate that the German federal government is poised to extend approximately €5 billion in support, while TSMC, Bosch, Infineon, and NXP are set to invest €3.5 billion, €500 million each.
TSMC will oversee the operation of the production facility, endowed with a monthly production capacity of 40,000 300mm wafers. The facility’s operation is projected to create around 2,000 direct job opportunities. Dr. CC Wei, CEO of TSMC, emphasized the strategic significance of this move, expressing eagerness to harness Europe’s potential for semiconductor innovation in key sectors.
The consortium partners are already active contributors to the growth of the semiconductor industry in Germany. Infineon’s independent chip factory construction plans, Bosch’s large-scale silicon carbide power semiconductor production, and the impending collaboration between US semiconductor manufacturer Wolfspeed and ZF for SiC semiconductor production underscore the concerted efforts to fortify the semiconductor ecosystem in the region.
Dr. Stefan Hartung, Chairman of the Bosch Board of Management, noted that semiconductors not only underpin Bosch’s success but are also integral to the global automotive industry’s triumph. He further underscored the importance of securing supply chains by aligning with partners such as TSMC, bolstering the semiconductor ecosystem in proximity to Bosch’s semiconductor plant in Dresden.
The initiative aligns with the European Chips Act’s framework, designed to enhance semiconductor production in Europe. The overarching goal is to elevate Europe’s global semiconductor production share to 20% by 2030, a vision that the collaborative effort between TSMC, Bosch, Infineon, and NXP undoubtedly bolsters.
