The world-renowned semiconductor company TSMC has made a massive investment in Germany by establishing a large-scale factory. Chancellor Olaf Scholz’s ruling coalition will provide subsidies of up to 5 billion euros for the factory to be built in Dresden, which will specialize in chip production for the automotive sector. Here are the details…

Semiconductor giant TSMC has made an investment in Germany

The impending TSMC approval for the new factory was first reported by Germany’s Handelsblatt newspaper on early Monday morning. Representatives from the Ministry of Economy in Berlin and the regional government of Saxony, where Dresden is located, refrained from commenting to local agencies. TSMC spokesperson Nina Kao stated that they would not provide further comments.

Governments worldwide are fiercely competing to establish new chip factories in order to gain more control over the production of components critical to global supply chains. At the height of the Covid-19 pandemic, supply disruptions led to widespread shortages in industries, including automobiles and consumer electronics, exposing the risks faced by nations heavily dependent on foreign stocks.

Germany has emerged as one of the most aggressive countries in pursuit of increased domestic production. Familiar sources report that the Scholz government is expected to approve a plan this week to raise approximately $22 billion for a fund aimed at semiconductor production, in conjunction with climate protection measures. Intel, on the other hand, is preparing to receive around $11 billion in subsidies from the German government for its own chip complex in Berlin.

Taiwan-based TSMC is in talks with partners such as NXP Semiconductors NV, Robert Bosch GmbH, and Infineon Technologies AG to invest in the new German venture. TSMC Chairman Mark Liu has confirmed that the company is considering having minority stakes for its customers in the German factory, although he did not reveal the names of interested parties.