TSMC mulls Germany for first European chip plant

TSMC is considering establishing its first European semiconductor plant in Germany as the global chip shortage continues and countries are eager to attract chipmakers to their territories.

TSMC is in talks with “multiple clients” about the feasibility of creating a chip wafer plant in the European nation, according to Nikkei Asia.

"We're in the preliminary stage of reviewing whether to go to Germany," said Mark Liu, the company’s chairman. "It's still very early, but we are seriously evaluating it, and [a decision] will depend on our customers' needs."

Liu also revealed that TSMC is discussing ways to lower operating costs for its first-ever wafer plant in Japan.

"The cost to build and operate a chip plant in Japan is much higher than doing so in Taiwan. We are directly discussing with our clients ways to narrow the cost gap there," Liu said. "Once we go through the due diligence process, our goal is to at least be break-even in costs."

Liu added that the company’s chip plant in Arizona will mainly focus on the demand for infrastructure and national security-related chips, which clients have requested, instead of consumer electronics chips.

"TSMC does not rule out any possibilities, just like our chairman Dr. Mark Liu had shared in AGM on 26th July, TSMC is now doing a preliminary assessment for a potential fab in Germany, there is no concrete plan at this time. It is still in a very early stage and no further information is available," a spokesperson from TSMC said to IT Pro.

In May, it emerged that discussions regarding the creation of a TSMC semiconductor plant in Europe reportedly collapsed. The company had been in talks with the European Commission about opening a factory in the region in an effort to combat the global semiconductor shortage on the continent. Talks, however, went “very poorly” according to a Reuters source, which saw TSMC divert its attention to the US.

At the start of June, the Japanese government approved a $338 million research project in which TSMC will develop new chip technology. Over 20 Japanese companies are set to take part in the project of which the Japanese government will pay half. The research will focus on tech for 3D chip assembly to allow the creation of components that are more dense but still small.

Moreover, TSMC was reportedly going ahead with creating five new chip plants in Arizona in May, representing a shift of some of the company’s manufacturing to the US. Reuters reported that this expansion came at the request of the US government.