TSMC is still negotiating the construction of a chip factory in the German city of Dresden. TSMC senior vice president Kevin Zhang reports this on Tuesday to Tweakers, among others. The company will make a decision ‘at the earliest’ in August.
TSMC is currently working on its due diligenceprocess for the construction of a chip factory in Dresden. Kevin Zhang tells this during a private Q&A session with journalists in Amsterdam, where Tweakers was present. “So far we have made good progress. We have a lot of support from the local government and the European Union. We are now going through our internal review and approval process.” Zhang reports that TSMC has no concrete timeline in which it wants to make a final decision. However, that will happen ‘at the earliest’ in August.
A German TSMC chip factory should contribute to a more diverse chip supply chain, says Zhang. He adds that Europe is a “very important” region for TSMC given the customer base and demand for chips in the EU. TSMC delivered 1.9 million wafers to customers in the last year EMEA-region. Worldwide, the chipmaker supplied a total of 15.3 million wafers.
When the German factory opens, it will focus on the production of microcontrollers for cars. This will initially be done using relatively old processes. “If we build a factory in Dresden, we will probably start with 28nm,” says Zhang, although that doesn’t necessarily rule out the possibility that the factory will also produce on more advanced nodes in the future. For example, TSMC is currently working on an N6A node. That is a 6nm variant that is specially intended for the automotive sector. Automakers would “eventually” design microcontrollers on 6nm, although that won’t happen for the next few years, Zhang expects.
Reports have been circulating for some time about the possible arrival of a TSMC chip factory in Dresden. The company said in 2021 that it a chip factory in Germany. Bloomberg reported earlier this month that the company wants to build the factory in collaboration with Bosch, Infineon and NXP. In total, the factory would involve an investment of up to ten billion dollars. TSMC does not confirm that amount. The chipmaker also did not specifically comment on reports that the German factory will become a joint venture with other companies. A spokesperson for the chipmaker said on Tuesday that TSMC normally fully owns its factories, but that it could potentially work with partners for an eventual European factory. The company did that earlier with its new factory in Japan, which TSMC is building in collaboration with Sony.
Last month reached the EU an agreement on the European Chips Act. This will free up a total of 43 billion euros for the European chip sector. A large part of this is paid in by individual Member States and is reserved as a subsidy for the construction of new factories within the EU. TSMC can also claim this if it decides to continue with the German chip factory. The company did not say on Tuesday how much subsidy it hopes to receive.