The world’s leading semiconductor company, TSMC, is considering plans to build a plant in Germany in a joint project with Bosch, Infineon, and NXP. This move could bring TSMC to Europe for the first time. The plant is expected to focus on manufacturing processes with structure widths of either 28 nanometers or 22 nm, aiming to provide automotive chips, such as power control. Car manufacturers mostly require modern manufacturing processes of up to 5 nm.
According to sources, the semiconductor plant in Dresden will require between €7 billion and €10 billion, including state subsidies. A decision from TSMC on the plan is expected in August. The joint project with Bosch, Infineon, and NXP is likely to create a newly founded company, as TSMC is taking a similar approach in Japan with its joint venture with Sony, Toyota, and Denso.
Dresden is the preferred location for TSMC’s expansion into Europe, as Bosch and Infineon already operate semiconductor factories in the region. These fabs are designed for coarser structures up to 65 nm. Infineon has also recently started construction of a new fab next to its existing facility. The infrastructure for chip production is already in place with local silicon suppliers as well. Furthermore, NXP Semiconductor maintains a research center in the area.
Depending on preliminary decisions, TSMC’s automotive chips could pave the way for their presence in the European market. The company would still produce processors for infotainment systems in Taiwan if required. The chip contract manufacturer is already working with Bosch, Infineon, and NXP. Ultimately, TSMC’s expansion into Germany has the potential to benefit both parties.