Bloomberg: TSMC wants to invest up to 10 billion euros in German chip factory

TSMC is in talks with partners to spend up to 10 billion euros on the construction of a chip factory in Germany. Insiders report this to Bloomberg. The company could approve the plans in August. The fab will produce 28nm chips according to Bloomberg.

The potential factory would be a company of TSMC, NXP, Bosch and Infineon and will be located in the German state of Saxony. According to Bloomberg sources the project will receive a budget of at least seven billion euros, including any subsidies, but that would probably be closer to ten billion euros. No final decision has been made yet and plans are subject to change.

TSMC could approve plans for the plant as early as August. The factory would then be focused on the production of 28nm chips, “some of the sources” quoted by Bloomberg report. The focus is on chips for the automotive sector. It would be the first chip factory that TSMC builds in Europe.

TSMC already reported in 2021 that the company is considering a chip factory in Germany, although it has since shared few concrete details about it. In March, Reuters reported that negotiations were at an advanced stage. A TSMC spokesperson told Bloomberg that the company was still exploring the possibility of building a factory in Europe, but did not elaborate. Spokesmen for NXP, Bosch, Infineon and the German Ministry of Economy did not respond to questions from the news agency.

TSMC is, among other things, in talks with the German government about subsidies to build the factory. These would be distributed under the European Chips Act, on which the EU reached an agreement in April. The amount of the possible subsidy is not known. Previous similar projects in Germany were subsidized up to 40 percent, according to Bloomberg. Under the European Chips Act, several other chipmakers previously pledged to build chip factories in Europe, including Intel, STMicroelectronics and GlobalFoundries. However, Intel previously said it would postpone the construction of its European factories and is asking for more subsidies due to high energy costs, according to Handelsblatt sources.