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TSMC's €10bn Investment in German Microchip Plant: A Boost for Europe's Semiconductor Industry

TSMC invests €10bn in German microchip plant, boosting Europe's semiconductor industry.

Taiwanese semiconductor giant TSMC has announced a significant investment of over €10 billion in a new microchip plant in Germany. This move, supported by €5 billion in subsidies from the German government, is expected to bolster Europe's semiconductor industry and create around 2,000 jobs.

Key Takeaways

Investment Details

TSMC, the world's largest semiconductor manufacturer, will collaborate with European companies Bosch, Infineon, and NXP, each holding a 10% stake in the new plant. The German economy minister, Robert Habeck, hailed the investment as proof of Germany's competitiveness in key technologies like microelectronics.

The German government has fast-tracked the approval process for the project, with construction expected to commence in the latter half of 2024. Production is slated to begin in 2027, focusing on chips for the automotive sector.

The Chips Act and Its Impact

Europe has faced significant supply bottlenecks in microchips in recent years, severely impacting industries like automotive manufacturing. In response, the European Union passed the Chips Act, aiming to double the EU's global share of chip production from 9% to 20% by 2030. The Act provides a financial framework of €43 billion to support this goal.

The Chips Act also allows for more flexible state aid, which Germany is leveraging to attract semiconductor investments. However, the European Commission has yet to green-light the subsidies for TSMC's project.

Germany's Growing Semiconductor Hub

Germany has been successful in attracting major chip manufacturers recently. In June, Intel announced a €30 billion investment in a new plant in Magdeburg, supported by €10 billion in subsidies. Similarly, Wolfspeed and Infineon have also made significant investments in Germany, benefiting from extensive state aid.

German Chancellor Olaf Scholz emphasized the importance of these investments for the country's and Europe's future viability. Saxony, the location for TSMC's new plant, has a rich history in electronics and is already home to several chip manufacturing facilities.

Challenges and Opportunities

While the investment is a significant boost for Germany's semiconductor industry, it also presents challenges. Filling the 10,000 vacancies expected to be created by the factory and its suppliers will require substantial investments in training and possibly increased immigration.

Critics argue that extensive subsidies could undermine the single market and disproportionately benefit wealthier EU countries. However, proponents believe that such state aid is essential for Europe to remain competitive globally, especially given high energy prices.


TSMC's €10 billion investment in a new microchip plant in Germany marks a significant milestone for Europe's semiconductor industry. Supported by substantial state aid and the EU's Chips Act, this project is expected to enhance Europe's chip production capabilities, create thousands of jobs, and strengthen the region's competitiveness in key technologies.

As Germany continues to attract major semiconductor investments, the country is poised to become a central hub for chip manufacturing in Europe, contributing to the resilience and future viability of the continent's economy.