Germany is in the sights of TSMC to host its first factory in Europe

TSMC or also known as Taiwan Semiconductor Manufacturing Company, recently announced that has Germany in its sights, since that is where you want to build a plant to manufacture your chips.

The company said it was still too early to say whether it would build factories in Germany and that the talks were still far from a statement, however. the expansion plan from Taiwan semiconductor manufacturer It comes at a time when the EU seeks to reduce chip imports, but also eliminate the risk of espionage, in the midst of a supply shortage.

In addition to the EU seeks to boost semiconductor production and protect itself from shocks in the global supply chain. Thus, since the beginning of the year, the European Commission has held talks with the global giants of the chip industry, including Intel and TSMC.

In response to this move, TSMC said the company had started considering building a plant in Germany. The decision will depend on the demand and the requirements of the customers. TSMC, while the cost of the installation will be shared between TSMC, its customers and / or local or state governments.

"We are in the preliminary phase of considering whether to go to Germany," TSMC Chairman of the Board of Directors Mark Liu told shareholders at the company's annual general meeting. "It is still too early, but we are seriously evaluating it and [a decision] will depend on the needs of our customers," he added. The comments are the latest sign that the world's most valuable chip company is moving away from its decades-long strategy of concentrating most of its chip production in Taiwan.

The company is already building a factory $ 12 billion chip in Arizona and plans to build your first chip factory in Japan. Regarding TSMC's advanced plant in the United States, Liu said it will support customer demand, especially in infrastructure and national security.

“Customers are the backbone of our global expansion. We will act very carefully, ”Liu said. The plant will be TSMC's first facility in the country in twenty years. Production is expected to start in about two and a half years, or early 2024.

Former TSMC Founding Chairman Morris Chang, It recently warned that the rush to bring semiconductors home would generate massive costs without guaranteeing the self-sufficiency of chips that large economies seek. As part of its establishment in Japan, Liu said the company is currently discussing with its Japanese clients ways to reduce operating costs. According to him, the cost of building and operating a chip factory in Japan is much higher than in Taiwan.

“We are talking directly with our Japanese customers about ways to reduce the cost differential. Once the due diligence process is complete, our goal is to at least break even in terms of costs, ”Liu said.

According to analysts, very few designs developed in the EU require the advanced processes for which TSMC is known. According to them, build a semiconductor production facility compatible with N3 or N2 (3nm or 2nm) in Europe it doesn't make much sense (This is also what the European bureaucrats want).

Nonetheless, there are enough European companies in the automotive and telecom industries using the advanced and mature nodes of TSMC.

There are independent outsourced companies semiconductor assembly and testing companies offering similar services, but also located in Taiwan, China or other Asian countries. Therefore, If the chips can be made in Europe, they will need to be shipped to Asia for testing and assembly, and then returned to Europe, where they will be used.

Right now, TSMC is not talking about building a packaging facility in Europe, but it appears that decentralization of the entire supply chain may be necessary for TSMC customers to eliminate geopolitical risk.

Moreover, It is important to note that the EU has committed to investing up to € 145 billion to develop next-generation processors and improve the 2nm etching process for processors. This could also be used to fund test and conditioning units in the Union.

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  1.   Coke said

    I think what the European Union does is very positive, it opens up trade