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TSMC set to start constructing German fab in 2H24

Daniel Nenni

Staff member


TSMC is set to begin constructing a wafer fab in Dresden, Germany, during the second half of 2024, having just unveiled its latest one in Kumamoto, Japan.
Dresden has a substantial semiconductor ecosystem, with Infineon Technologies, Bosch, and GlobalFoundries (GF) already running plants there. TSMC chairman Mark Liu has pointed out that the German fab will cater to the industrial and automotive sectors. It has obtained order commitments from the partners and support from the Saxony state and Dresden city governments.

TSMC, Bosch, Infineon, and NXP Establish Joint Venture to Bring Advanced Semiconductor Manufacturing to Europe

Hsinchu, Stuttgart, Munich, Eindhoven, Aug 8, 2023TSMC (TWSE: 2330, NYSE: TSM), Robert Bosch GmbH, Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY), and NXP Semiconductors N.V. (NASDAQ: NXPI) today announced a plan to jointly invest in European Semiconductor Manufacturing Company (ESMC) GmbH, in Dresden, Germany to provide advanced semiconductor manufacturing services. ESMC marks a significant step towards construction of a 300mm fab to support the future capacity needs of the fast-growing automotive and industrial sectors, with the final investment decision pending confirmation of the level of public funding for this project. The project is planned under the framework of the European Chips Act.

The planned fab is expected to have a monthly production capacity of 40,000 300mm (12-inch) wafers on TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology, further strengthening Europe’s semiconductor manufacturing ecosystem with advanced FinFET transistor technology and creating about 2,000 direct high-tech professional jobs. ESMC aims to begin construction of the fab in the second half of 2024 with production targeted to begin by the end of 2027.

The planned joint venture will be 70% owned by TSMC, with Bosch, Infineon, and NXP each holding 10% equity stake, subject to regulatory approvals and other conditions. Total investments are expected to exceed 10 billion euros consisting of equity injection, debt borrowing, and strong support from the European Union and German government. The fab will be operated by TSMC.

“This investment in Dresden demonstrates TSMC’s commitment to serving our customers’ strategic capacity and technology needs, and we are excited at this opportunity to deepen our long-standing partnership with Bosch, Infineon, and NXP,” said Dr. CC Wei, Chief Executive Officer of TSMC. “Europe is a highly promising place for semiconductor innovation, particularly in the automotive and industrial fields, and we look forward to bringing those innovations to life on our advanced silicon technology with the talent in Europe.”

Dr. Stefan Hartung, chairman of the Bosch board of management: “Semiconductors are not only a crucial success factor for Bosch. Their reliable availability is also of great importance for the success of the global automotive industry. Apart from continuously expanding our own manufacturing facilities, we further secure our supply chains as an automotive supplier through close cooperation with our partners. With TSMC, we are pleased to gain a global innovation leader to strengthen the semiconductor ecosystem in the direct vicinity of our semiconductor plant in Dresden.”

“Our joint investment is an important milestone to bolster the European semiconductor ecosystem. With this, Dresden is strengthening its position as one of the world’s most important semiconductor hubs that is already home to Infineon’s largest frontend site,” said Jochen Hanebeck, CEO of Infineon Technologies. “Infineon will use the new capacity to serve the growing demand particularly of its European customers, especially in automotive and IoT. The advanced capabilities will provide a basis for developing innovative technologies, products and solutions to address the global challenges of decarbonization and digitalisation.”

“NXP is very committed to strengthening innovation and supply chain resilience in Europe,” said Kurt Sievers, President and CEO of NXP Semiconductors. “We thank the European Union, Germany, and the Free State of Saxony for their recognition of the semiconductor industry’s critical role and for their true commitment to boost Europe’s chip ecosystem. The construction of this new and significant semiconductor foundry will add much needed innovation and capacity for the range of silicon required to supply the sharply increasing digitalization and electrification of the automotive and industrial sectors.”

From an older article:

"The move adds to Berlin’s strategy to become a leading European hub for chip manufacturing, backed by generous state support. The EU as a whole is, meanwhile, seeking to double its share of the global semiconductor market from 10 to 20 per cent by the end of the decade. Tuesday’s announcement comes on the heels of a decision by Intel in June to build two wafer fabrication sites in eastern Germany in the single biggest instance of foreign direct investment in the country’s history. The chipmaker Infineon, meanwhile, broke ground on its chip factory in Dresden in May."

Also GF was looking for further investments in Dresden, so Europe share could really get close to 20% by 2030. Not great not terrible.
Germany could be a big chip manufacturing player for sure. Hopefully the rest of Europe will do the same. I visited GF in Dresden years ago. It was AMD SOI moving to STM FD-SOI. Do you think GF will fade out FD-SOI in favor of FinFETs? What is the split there? Back then GF was talking about 22FDX moving to 12FDX. Is that still the plan?

Personally I think FinFETs still have a very long life ahead. GF should be able to get down to non EUV 5nm FinFET like SMIC, right?

I have a podcast recording with GF today so I will ask.
How do Germans work both the construction as well as the engineers? This isn’t Japan, China, look at the US. Wonder how many Taiwanese TSMC will need to take to Germany