The European Commission has authorized EUR 5 billion in state aid for the construction and operation of a chip manufacturing facility in Dresden, Germany.
The plant will be developed by the European Semiconductor Manufacturing Company (ESMC)—a joint venture involving Taiwan Semiconductor Manufacturing Company (TSMC) along with Bosch, Infineon, and NXP. This will mark TSMC’s inaugural manufacturing site in Europe.
TSMC will invest EUR 3.5 billion of the total EUR 5 billion committed by the companies and will hold a 70% stake in the project. The remaining 30% will be equally divided among Bosch, Infineon, and NXP, each securing a 10% equity share.
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Contributing to the EU’s Digital, Green Transition
The commission stated, “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.”
The commission also highlighted that the initiative would support the EU in attaining its digital and green transition objectives. The new plant is anticipated to be fully operational by 2029, with a projected annual output of 480,000 silicon wafers. These wafers will feature node sizes ranging from 28/22nm to 16/12nm.
The commission indicated that the factory will operate as an “open foundry,” allowing any customer, including the three other shareholders in addition to TSMC, to place orders for the production of specific chips.
“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,” the commission added.
Read More: European Commission Allocates €762.7 Million for Digital Advancements
Ursula von der Leyen, the recently reappointed President of the Commission, highlighted in her speech at the groundbreaking ceremony for the ESMC plant that the initiative will create 11,000 new jobs for European workers, both in Germany and across the 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.”
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