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Germany spends big to win $11 billion TSMC chip plant

Taiwanese chipmaker TSMC on Tuesday committed 3.5 billion euros ($3.8 billion) to a factory in Germany, its first in Europe, taking advantage of huge state support for the $11 billion plant as the continent seeks to bring supply chains closer to home.

The plant, which will be TSMC’s third outside of traditional manufacturing bases Taiwan and China, is central to Berlin’s ambition to foster the domestic semiconductor industry its car industry will need to remain globally competitive.

The European Union has approved the European Chips Act, a 43 billion euro subsidy plan to double its chipmaking capacity by 2030, in a bid to catch up with Asia and the United States after shortages and high prices during the COVID-19 pandemic created havoc for the continent’s carmakers and machine builders.

Germany, which has been courting the world’s largest contract chipmaker since 2021, will contribute up to 5 billion euros to the factory in Dresden, capital of the eastern state of Saxony, German officials said.

“Germany is now probably becoming the major location for semiconductor production in Europe,” German Chancellor Olaf Scholz said, less than two months after Intel announced a 30 billion euro plan to build two chip-making plants in the country.

“That is important for the resilience of production structures around the world, but it is also important for the future viability of our European continent, and it is of course particularly important for the future viability of Germany.”

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