The supply crisis that occurred after the pandemic has exposed Europe's industrial dependence on China, especially when it comes to aluminum and microchips. These are so essential that whoever controls the supply of microchips controls the world.
Hence the importance of the fact that the Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest semiconductor foundry, is in talks with its partners to build a plant in Germany.
This project is part of the European Chips Act, an aid package of 43,000 million euros approved by the European Union with the aim of doubling the European production of semiconductors and reaching a world market share of 20%.
According to Bloomberg, TSMC will partner with Bosch, NXP, Bosch, and Infineon to invest in a joint semiconductor plant in the country. The project would have state subsidies within the framework of the European Chips Act and would have a budget of at least 7,000 million euros, with a total investment probably close to 10,000 million euros.
Located in Dresden, the plant is expected to focus on 28-nanometer chips for the automotive industry. This factory would be the first factory of the Taiwanese company in Europe. However, it should be noted that the project is not yet final.
Even so, one of the reasons why TSMC will most likely choose Germany for its factory is the network of local suppliers linked to the automotive industry, led by Bosch, one of TSMC's partners for this factory.
With the rise of the electric car and autonomous driving, the cars that will hit the market in the next 10 to 15 years will require many microchips and up to 10 times the computing power of today's best chips. The automotive industry will increasingly need next-generation chips, similar to those in consumer electronics that can be found in the latest iPhone or Samsung. TSMC wants to be there and meet that demand.
Manufacturing closer to customers
In addition to Europe, TSMC will also expand its activities in the United States and Japan, again in the context of local legislation aimed at stimulating the semiconductor industry.
Although the company produces most of its technology in Taiwan, it has begun to look abroad amid rising geopolitical tensions between mainland China and Taiwan.
Germany, Europe's largest economy, is especially coveted by semiconductor makers. The US giant Intel also plans to set up a production plant there and has asked the government for more subsidies in the context of price inflation.
The competition to attract microchip factories seems to have Germany as the main winner, followed by France, which has seen how Intel plans to create a research center in France at the same time that STMicroelectronics and GlobalFoundries will build a factory in France.
Spain, with the aid of 12,000 million, will try to attract the production of less elaborate and larger semiconductors, from 10 to 24 nanometers. At the moment, there is an agreement with Cisco Systems for the creation of a microchip design center in Barcelona, while talks are underway with Samsung Electronics to build a factory in Spain. However, nothing is firm and Spain is one of several candidate countries to host the Samsung factory.
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