'European Semiconductor Manufacturing Company (ESMC)': In the form of a technologically and regionally finely balanced joint venture with Infineon, Bosch and NXP, the world's leading chip contract manufacturer TSMC from Taiwan is establishing its first base in Germany.
The news that the Taiwan Semiconductor Manufacturing Company is locating a new fab in Dresden is quite something. TSMC is thus helping the already well-equipped high-tech region of Dresden and its successful 'Silicon Saxony' brand to become even more important - and the hesitant Berlin traffic light coalition to achieve a grandiose boon in line with the motto 'Aufbau Ost'.
Federal Chancellor Scholz and Saxony's Prime Minister Kretschmer welcomed the arrival of TSMC with great enthusiasm - whereas a number of economic experts are critical of the cost-benefit profile of the funding provided.
The Taiwanese want to contribute around €3.8 billion of their own funds to the new JV and mobilize loans of a similar amount in order to raise the planned investment sum of at least €10 billion. The three junior partners will each contribute €500 million and will each be rewarded with a minority stake of 10%. According to a press release, ESMC wants to "offer advanced semiconductor manufacturing services", i.e. compete with Intel, Globalfoundries, STMicroelectronics, Infineon, Bosch and NXP. A 50-hectare industrial site near Dresden Airport is earmarked for the new plant.
This will give Infineon a competent neighbor in Dresden - both a competitor and a partner. Since this spring, Europe's largest chip manufacturer has been building a fab for power semiconductors there and plans to spend €5 billion on it. A state subsidy of €1 billion is being discussed. Two years ago, Bosch inaugurated a chip factory for 300 mm wafers, also near Dresden. Contract manufacturer Globalfoundries also has a large production facility here.
The new ESMC fab will be limited to TSMC's proven 28/22 nm planar CMOS and 16/12 nm FinFET process technologies, i.e. without the expensive EUV lithography required for process nodes at and below 7 nm. The fab will be designed for a monthly production capacity of 40,000 wafers and will create around 2,000 direct jobs in the high-tech sector. ESMC intends to start construction of the fab in the second half of 2024. Production is scheduled to start by the end of 2027. It is not yet known whether the backend, i.e. packaging and testing, will also be located in Dresden.
The German government has promised ESMC funding of €5 billion, almost half of the total investment sum - apparently in agreement with the EU regarding the rules of the European Chips Act. This brings many months of tough negotiations on both sides to a positive conclusion, particularly with regard to the level of subsidies and site conditions.
