TSMC to Lay Foundation for Its New Plant in Germany

In a bid to boost its global competitiveness, Taiwan Semiconductor Manufacturing Corporation (TSMC), the world’s largest contract chip maker, is set to hold ground-breaking ceremony for its plant at Dresden in Germany on Tuesday (August 20).

TSMC Chair C C Wei is said to be leading a delegation to mark the company’s official expansion into Europe, according to a report by Channel News Asia (CNA).

The German government welcomed the investment in Dresden and its Economics Minister Habeck said that it would make a substantial contribution to securing the supply of semiconductor chips for Germany and Europe.

“Robust domestic semiconductor production is of particular importance for our global competitiveness, because semiconductors keep our world running and make the transformation towards climate neutrality possible in the first place,” Habeck added.

TSMC also said that the European Semiconductor Manufacturing Company (ESMC) project is proceeding as planned. After the ceremony, site preparation will begin, and construction is expected to commence by the end of this year.

TSMC’s total investment in ESMC is expected to exceed $11.03 billion. The Taiwanese company holds a 70% stake in the project, while Bosch, Infineon, and NXP each have a 10% stake, the report said.

The German plant, for which Germany is reportedly providing a little over $5.5 billion (subject to approval from the European Union), is expected to begin chip production by the end of 2027, utilising TSMC’s 28/22nm complementary metal-oxide-semiconductor technology. It will have a monthly capacity of approximately 40,000 12-inch wafers.

Wei said that TSMC will continue to expand its overseas semiconductor fabs. This includes projects in Arizona and Kumamoto and the new plant in Europe, demonstrating that TSMC’s strategy remains unchanged.

Overseas Plants

Besides Dresden plant, TSMC also has production facilities in Arizona in the US, Nanjing and Shanghai in China besides Kumamoto in Japan.

TSMC has announced in May 2020 that it will build a 4nm fab in Arizona that’s scheduled to start mass production in 2025. The plant will also have a second facility that’s expected to produce more advanced chips in 2028. TSMC’s Arizona operation will use water recycling systems to provide about 65% of the water it needs, with the goal of eventually reaching 90% water reclamation.

In October 2021, TSMC established a subsidiary called Japan Advanced Semiconductor Manufacturing (JASM) in Kumamoto, Japan, in collaboration with Sony Semiconductor Solutions. The plant was opened in February and production is expected to begin by end of 2024.

Kumamoto’s chip fabrication plant is equipped with a clean room — a controlled and sterile environment critical for chip making — with about 45,000 sq m of area.