Taiwan Semiconductor Manufacturing Company (TSMC), a leading chipmaker, is reportedly in negotiation with the German government over possible subsidies for a proposed chip plant in Dresden.
As reported by Bloomberg, TSMC allegedly aims for a refund covering approximately half of the estimated project cost of 10 billion euros. The dialogue is ongoing between TSMC, the German government, and potential collaborators including Bosch, Infineon, and NXP. The sources cited by Bloomberg indicated that the exact subsidy amount is still to be determined, with the final decision not yet made. Moreover, all subsidy arrangements must be evaluated and authorized by the European Commission. The maximum subsidy amount reportedly under consideration aligns with the financial aid TSMC received for a similar project in Japan. Other chip manufacturing projects within the European Union have previously been granted subsidies covering up to 40% of construction costs.
Reports of a potential TSMC chip manufacturing facility in Dresden, Germany have been circulating for some time. TSMC signaled its interest in establishing a German plant in 2021, with previous Bloomberg reports suggesting a possible joint venture with Bosch, Infineon, and NXP. The proposed facility's value is estimated between seven to ten billion euros.
The proposed TSMC subsidy falls under the recently enacted European Chips Act. This legislation designates 43 billion euros for the European chip sector, with significant contributions from member states such as Germany to facilitate new factory construction. Other industry players, including Intel, have shown interest in claiming subsidies for proposed chip manufacturing plants in Germany.