The new foundry will produce wafers for customers in addition to the four stakeholders, TSMC, Bosch, Infineon and NXP
As the global scramble for silicon continues, the European Commission has approved €5 billion in state support to build and operate a chip manufacturing plant in Dresden, Germany.
It will be built by European Semiconductor Manufacturing Company (ESMC), which is a joint venture between the world’s biggest chip maker, Taiwan Semiconductor Manufacturing Company (TSMC), Bosch, Infineon and NXP. This is TSMC’s first manufacturing facility in Europe.
TSMC will contribute €3.5 billion out of the €5 billion to be invested by the companies and take a 70% stake. The other three will each have 10% equity.
Bosch opened a €1 billion new wafer fab in Dresden (pictured) in late 2021.
Strengthening Europe
The Commission said in a statement, “The measure will strengthen Europe’s security of supply, resilience and digital sovereignty in semiconductor technologies, in line with the objectives set out in the European Chips Act Communication”. This set aside a €43 billion fund to increase the manufacturing of chips in the European Union (EU).
The body also noted it would help the EU achieve some of its digital and green transition targets.
It is expected that the plant will be running at full capacity by 2029 and will produce 480,000 silicon wafers “with node sizes covering 28/22nm and 16/12nm” annually.
The factory is to be an “open foundry, meaning that any customer – including but not limited to the three other shareholders besides TSMC – can place orders for the production of specific chips,” the Commission said. “This operating model is important for the wider EU ecosystem, especially in view of ESMC’s commitments to provide dedicated support to European small and medium enterprises (SMEs) and startups, to strengthen their knowhow and competences.
“The facility will also provide special access to its production capacities for SMEs and European universities, further supporting research and knowledge creation within Europe,” added the commission.
Intel is also building new chip fabs in Germany after a revised, €30 billion agreement last year.
Ursula von der Leyen, the newly reappointed President of the Commission said, “European workers will gain 11,000 new jobs, both [in Germany] and across our continent. European chip companies will gain access to new technologies and production capacities. European industries will benefit from more reliable local supply chains, and new products that are tailored to their needs.”