Executives from TSMC travelled to Germany earlier this year to have preliminary negotiations about the supply of chips made in-country. However, the move was shelved as a result of the invasion of Ukraine and a brief decline in demand. Now it seems that growing demand from European automakers for readily available semiconductors has prompted a change of heart at TSMC.
The EU is Looking for Alternatives to Reduce its Global Semiconductor Dependency
The European Union, seeking to reduce its dependence on importing semiconductors from Asia and which are crucial components in everything from smartphones to vehicles, would benefit significantly from the decision to establish the facility. In an effort to lure chipmakers to Europe, 43 billion euros in subsidies were agreed upon by Brussels earlier this year. People with knowledge of the situation indicated that TSMC’s discussions with several material and equipment suppliers are centered on their ability to make the expenditures necessary to sustain the factory. Chip manufacturing is a complicated process that uses more than 2,000 components, including chemicals and industrial gases, and more than 50 different kinds of equipment, including lithography and etching devices. The international growth of TSMC comes as major chipmakers like Intel and Samsung compete to increase capacity. The three largest chip manufacturers in the world have promised to spend at least $380 billion over the next ten years to construct new plants in Taiwan, South Korea, the United States, Japan, Germany, Ireland, and Israel. The CHIPS Act, presented in 2020 and enacted by Congress last year, has led to almost $200 billion in private investment in the nation’s chipmaking capacity in the United States.
