Belgium, (Brussels Morning Newspaper) The Taiwan Semiconductor Manufacturing Company (TSMC) is preparing to set up a production plant in Dresden, according to sources.
The company is negotiating with suppliers and will send a delegation to Germany at the start of 2023 to negotiate government support for the project, the Financial Times reported on Friday.
Sources stressed that TSMC is checking the capacity of local suppliers to see whether it is sufficient to justify opening a production plant in Germany to capitalise on rising demand in the region.
The visit at the start of next year will be TSMC’s second in six months, with sources stressing that the chipmaker is to make the final decision on the potential plant after the visit.
The company is thinking about investing billions of euro into the plant, noting that construction could start in 2024. Customers called on TSMC last year to build a plant in Europe, but talks were put on hold as the conflict in Ukraine broke out.
According to sources, European car industry’s rising demand for locally produced chips prompted the company to revisit the idea.
The production plant would help the EU to lower its reliance on chip imports from Asia and support local production of high-tech products from consumer electronics to cars.
EU attracting chipmakers
Earlier this year, the European Commission approved subsidies worth 43 billion euro to attract semiconductor manufacturers to the bloc. Sources pointed out that TSMC’s talks with suppliers are aimed at determining whether they can invest in production to meet the potential plant’s needs.
“We would try to support our customers,” an executive from one supplier noted and added that the company would require state support to strengthen its production capacity.
Chip production requires high-tech equipment and more than 2,000 materials including industrial gases and chemicals.
As TSMC is building factories in the US and Japan, the company noted that building a facility in Dresden could put too much strain on its workforce, pointing out that it is sending hundreds of engineers to the US and Japan each to set up production there.
TSMC stressed that it was not ruling out any possibilities when it comes to the potential production facility in Dresden.
