TSMC To Initiate Construction of First European Fab In Germany Next Month, Production Expected By 2027

TSMC is all set to start constructing its first European fab in Germany by next month as the Taiwan giant moves towards becoming a "global" semiconductor leader.

The semiconductor giant is on the way toward becoming a dominant force in the market since TSMC has expanded its region of influence, coming more towards the West. The Arizona facility in the United States is indeed a restatement that TSMC doesn't want to be "region-bounded," and now, with the disclosure of the fab in Europe, the firm may very well be set for catering to global markets, hence downplaying the influence of competitors such as Intel Foundry.

The news comes from Nikkei Asia, which discloses that TSMC plans to initiate the construction of its fab in Dresden, Germany, by August, being right on time to start production by late 2027. It is said that the firm has partnered up with regional firms such as Bosch, Infineon, and NXP, providing them each with a stake of 10%, respectively, while TSMC themselves will hold a 70% share. The German government has partnered up with the Taiwan giant as well, allocating them a subsidy of  3.5 billion euros, which is said to cover half of the costs of the foundry itself.

In terms of the processes, TSMC's Germany fab is said to initially focus on 28/22nm planar CMOS and 16/12nm FinFET process technologies, with room for expansion based on the anticipated demand. The fab will also create 2,000 high-tech professional jobs and will prove to be a breakthrough for the European Union, which has shifted its focus towards expanding regional semiconductor capabilities through incentives such as the EU Chips Act, a 43 billion euro subsidy plan.

Meanwhile, things are looking tight for competitors such as Intel in the region, given that Intel's fab in Germany will be responsible for building cutting-edge processes such as the 18A. Given the high costs associated with such production lines, the local government has denied additional subsidies for Team Blue, further creating an economic imbalance. With TSMC potentially entering the region, we might see heightened competition from the IFS, but that remains uncertain for now.