TSMC is negotiating with Germany or building factories there

[News-Oxcart Network]

According to foreign media reports, a senior executive of semiconductor manufacturing company TSMC revealed that the company is in early talks with the German government on building a factory in the local area.

On December 11, He Limei, senior vice president of sales for TSMC Europe and Asia, said that a variety of factors, including government subsidies, customer demand and talent reserves, will affect the company's final decision.

At present, the EU and other regions are looking to increase chip production in the region to alleviate future supply chain disruptions. Therefore, TSMC's consideration of building its own factory is also one of the important measures to fundamentally alleviate the shortage of chip supply. He Limei revealed that TSMC has not yet begun discussions with the German government about incentive measures, nor has it decided on the location of the plant.

However, the industry has evaluated three possible ways for TSMC to deploy in Germany, including self-built factories, compared with the initial Singapore factory investment model, and German officials and major customers to negotiate co-investment, or to take the form of technology investment to set up a joint venture in Germany and then authorize long-term partners in Europe. As the negotiation process involved a variety of possibilities, it is expected that the final outcome will take some time to come to the surface.

The move is one of many construction projects undertaken by TSMC to expand its production capacity globally. Previously, TSMC invested $7 billion in a semiconductor plant in Japan and a $12 billion plant in Arizona, usa, which will begin production in early 2024.

In June, TSMC Chairman Liu Deyin told shareholders that it had begun to assess the feasibility of establishing manufacturing operations in European countries.

Meanwhile, the European Union will introduce the European Chips Act in the first half of 2022 as part of the region's strategy to boost semiconductor production. One of the EU's goals is to produce 20 percent of its chips globally by 2030.

As we all know, TSMC is a semiconductor chip manufacturing leader and a foundry of many international giants such as Apple, Qualcomm, Intel, AMD and so on. The data shows that TSMC's chip supply accounts for more than 50% of the global wafer market all year round, which is several times the market share of competitors, and high-end process chips account for more than 80%.

At present, the world is focusing on investing in the field of chips, especially to improve the manufacturing capacity of domestic chips, so TSMC is also welcomed by many countries.

In August, Reinhard Ploss, CEO of German semiconductor giant Infineon, reiterated in an interview with local media that he was open to partnering with TSMC to set up factories in Europe, but stressed that the premise was government support. "Europe needs to reflect on the problem of excessive dependence on imports and lack of autonomy of chips, and it is a good thing to want to exert efforts in the semiconductor field, but the distance from the opponent may have to "jump the pole" to catch up. ”