Taiwan-based semiconductor manufacturer, TSMC, is in the process of finalizing plans to establish a manufacturing facility in Dresden, Germany. 

Recent deliberations by its Board of Directors point towards Dresden as the probable location, a sentiment further reinforced by government sources.

Financial arrangements for the establishment of this facility have been meticulously mapped out. The federal government has pledged a substantial five billion euros from the Federal Climate and Transformation Fund (KTF). Complementing this, TSMC has committed to invest an amount nearing ten billion euros.

Upon completion, the Dresden chip facility will rank as the second-largest financial investment in Germany's semiconductor sector, with only Intel's Magdeburg facility preceding it in terms of cost. Construction is slated to commence in 2024. Notably, the project is projected to be a collaborative effort involving Bosch, Infineon, and the Dutch-based NXP, with each entity acquiring a 10 percent ownership, contingent upon receiving the green light from the European Commission.

Although initial planning for this establishment traces back to 2021, external factors, notably the Ukraine conflict, led to an adjustment in the project's timeline. The factory is engineered with a specific focus on the fabrication of 28nm chips. These microcontrollers (MCUs) are primarily tailored for the automotive sector, playing a pivotal role in regulating electric motors and automotive battery systems. The timeline suggests that these chips could enter the production phase by 2025, if not earlier.

TSMC Plans German Chip Plant in Dresden (Funded by Government Support)