TSMC is building new chip-making plants in Europe to get away from U.S. - China tensions

The world's largest contract semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), is planning to build even more fabrication units, this time in Europe. This lines up with the growing demand for semiconductor chips for use in AI-intensive workloads, as well as the automobile sector.

TSMC has already started work on its first fab in Dresden, Germany. The company will focus on supplying automotive semiconductors from this fab and make 22nm and 28nm chips so that there's a steady supply of these chips for modern vehicles.

During the COVID-19 pandemic, many vehicles were left incomplete due to a significant chip shortage as the shipping routes were affected and these chips used to primarily come from TSMC's Taiwan facility.

The fab at Dresden is a joint venture called the European Semiconductor Manufacturing Company (ESMC), in which TSMC holds a 70% stake and an investment of €10 billion (around $10.9 billion), while the rest of the shares are held by partners Bosch, Infineon Technologies, and NXP Semiconductors. The plant should produce 40,000 wafers per month once fully operational (which is expected in 2027) and is set to create 2000 high-tech jobs.

TSMC is planning to set up even more fabs across Europe to focus on chips designed for AI. The expansion is part of TSMC's move to reduce geopolitical risks with China, which has impacted the global supply chain, apart from the pandemic.

Europe isn't the only place where TSMC is making new fabs. The company has projects in the U.S., as well as Japan. Recently, the company has started manufacturing Apple's A16 processors at its newly constructed fabrication unit in Arizona, which uses the 5nm technology.

Meanwhile, in Japan, TSMC is making semiconductors for Sony and Toyota using 40nm, 28nm, and 22nm processes. There's also a second fab under construction in the Kumamoto Prefecture, which will produce advanced chips using 6nm and 7nm process technologies.

Via Bloomberg

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