Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, has announced plans to build a factory in Dresden, Germany. This project, part of a joint venture with European companies, involves investments exceeding 10 billion euros ($11 billion). The move signifies another significant investment in Europe as Brussels aims to enhance its self-sufficiency in semiconductor production.

TSMC confirmed its partnership with Infineon Technologies, Robert Bosch, and NXP Semiconductors to establish the chip factory. The primary focus will be meeting the growing demand in the automotive and industrial sectors. The total investment of over EUR10 billion will consist of equity injections, debt borrowing, and support from both the European Union and the German government.

Under the agreement, TSMC will invest up to EUR3.50 billion in the joint venture. However, the final decision on this investment will depend on the level of public funding received.

TSMC's Chief Executive, C.C. Wei, expressed confidence in Europe as a promising hub for semiconductor innovation, particularly in the automotive and industrial fields.

The joint venture, named European Semiconductor Manufacturing Co., will have TSMC owning a 70% stake, while the three European companies will retain 10% each. TSMC will operate the plant, which is expected to commence construction in the second half of 2024 and begin production by the end of 2027. This new facility is projected to create approximately 2,000 highly skilled jobs.

This announcement closely follows Intel's agreement with Berlin to invest more than EUR30 billion in two semiconductor facilities in Germany. Intel is also planning to establish a semiconductor assembly and testing facility in Poland with an investment of up to $4.6 billion. This move further expands their presence in Poland, where they already operate their largest research-and-development facility in Europe, employing nearly 4,000 professionals.

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