TSMC will start building a European chip factory at the end of this year

TSMC will start building its European chip factory at the end of this year. The chipmaker confirmed this on Wednesday during an event in the Netherlands. The factory will be located in Germany and will produce chips using processes up to 12nm.

TSMC is ‘on schedule’ to start building its German chip factory in the fourth quarter of 2024. This is what Paul de Bot, head of TSMC’s activities in Europe, said during the TSMC Europe Technology Symposium 2024 at Schiphol. The chipmaker is building the factory in the German city of Dresden. According to the current planning, this chip factory should start mass production in 2027.

TSMC’s European chip factory was already announced in August last year. The company is building this factory together with Bosch, Infineon and NXP. The four companies are starting a joint venture called the European Semiconductor Manufacturing Company, or ESMC. The factory will soon be used to produce planar transistors on 28 and 22nm and finfets on 16 and 12nm. These will mainly be chips for cars; many of TSMC’s customers within Europe focus mainly on the automotive industry.

TSMC has been expanding outside its home country of Taiwan for some time. In addition to the European chip factory, the company has factories in the United States, Japan and China. These expansions are mainly driven by the needs of TSMC’s customers. This is what Dr. Kevin Zhang, senior vice president of the Taiwanese chipmaker, said during a press briefing . “Diversification [of TSMC’s production sites] improves resilience to unforeseen events,” Zhang told journalists.

Several governments, including in the US and the European Union, want to follow the chip shortages caused by the corona pandemic and increasing geopolitical voltages become more independent in the field of chip supplies. That’s why they want factories on their own territory. Currently, chip production, especially that involving advanced processes, is concentrated in a number of Asian countries. Governments often offer billions in subsidies for the construction of new chip factories within their border areas. TSMC and its partners also receive subsidies for the German chip factory. That amounts to five billion euros, about half of the total costs of this factory.