BERLIN (AFP) – Semiconductor giant TSMC broke ground Tuesday on its first European factory in the eastern German city of Dresden as the European Union (EU) looks to shift key supply chains onto the continent.
German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen attended the ceremony to mark the beginning of construction work along with TSMC’s top brass, with von der Leyen hailing it as “an endorsement for Europe as a global innovation powerhouse”.
Semiconductors have become indispensable in an array of industries, from electronics to wind turbines and even missiles.
TSMC is investing some EUR3.5 billion (USD3.9 billion) in the Dresden project and will own 70 per cent of the capital, with Dutch chipmaker NXP, Germany’s Infineon and Bosch owning 10 per cent each.
Scholz said on Tuesday that “we are dependent on semiconductors for the sustainable technologies of the future” and added that “we must not be dependent on other regions of the world for the supply” of the chips.
The Dresden facility will be specialised in the production of semiconductors for Germany’s flagship automotive industry, currently in the throes of transitioning to electric vehicle production.
Some EUR10 billion has been ploughed into the flagship project in the “Silicon Saxony” region, which has an industrial heritage dating back to the communist era.
The German government is supporting the Dresden plant with USD5 billion of public funds, and received an exemption from EU state aid rules to do so.
The facility is set to provide some 2,000 jobs and start production before the end of 2027.
It will have a monthly production capacity of 40,000 300-millimetre silicon wafers, one of the most advanced technologies.
