Taiwanese chip maker TSMC says it has ‘no plans yet’ for expansion in Germany

Taiwan Semiconductor Manufacturing Company (TSMC) said it has no expansion plans in Germany yet, after reports said the company was in talks with suppliers about potentially building its first European factory.

The Financial Times earlier reported that TSMC, the world’s largest contract chip maker, was in “preliminary discussions” with suppliers to build a factory in Dresden, Germany, citing unnamed sources “with knowledge of the matter.” Quoted.

According to the report, senior TSMC executives will visit Germany next year to discuss the level of government support for the factory and the ability of local supply chains to meet its needs.

According to the report, discussions with suppliers will focus on whether investments can be made to support future plants that, if approved, will manufacture 22-nanometer and 28-nanometer chip technologies. It’s a schedule.

However, TSMC has not confirmed whether there have been discussions about expanding its business in Germany.

“We don’t rule it out, but we have no plans at this time,” the company told the Epoch Times on Dec. 23.

company you said last year The company said it was in “early talks” with Germany about expanding its business there. TSMC said it would consider aspects such as government subsidies and customer demand before making a decision.

The Taiwanese company has also started construction of its first Japanese factory in Kumamoto prefecture. Japanese lawmaker Yoshihiro Seki said Friday that TSMC is considering building his second factory in Japan.

“I think TSMC is considering further investment in Japan. We need to create an environment that will make them want to work on advanced projects together.” (Mr. Seki) Said Reuters.

TSMC has not ruled out building a second fab in Japan, but said it has no concrete plans at this time.

Biden visits TSMC factory
President Joe Biden (C) greets workers as he tours the TSMC semiconductor manufacturing facility in Phoenix, Arizona, December 6, 2022. (Brendan Smialowski/AFP via Getty Images)

US expansion

The company is also building a factory in Arizona, USA. TSMC founder Morris Chang said on Nov. 2 that his company will introduce state-of-the-art his 3-nanometer chip-making process to its upcoming factory in Arizona.

Taiwan’s long dominance in global chip manufacturing has been dubbed the island’s “silicon shield” against Chinese aggression. Led by TSMC, 90 percent 80% of the world’s advanced chips are made in autonomous islands, more than half of global semiconductor foundry production

China and the rest of the world rely heavily on Taiwan’s advanced chip production capabilities. Taiwanese semiconductors are essential to almost every aspect of modern life, from smartphones to airplanes.

As a critical chokepoint for critical commodities, any disruption to the island’s operations would be devastating to global supply chains and the global economy, including China.

In this regard, many fear that TSMC’s plans to produce its most advanced chips in the US will undermine the security of the island. However, experts believe TSMC will keep the state-of-the-art technology on the island.

IT expert Hsu Chin-Huang told the Epoch Times on November 25 that TSMC has an “N minus 1” policy. Hsu said this principle has not changed.

He said that if TSMC introduces the 3nm process to the US, the company will be able to mass produce more advanced iterations such as 2nm or 1nm chips in Taiwan.

Generally, in semiconductor manufacturing, the smaller the process technology, the more advanced the chip. The smaller the technology node, the higher the transistor density, the lower the power consumption of the chip, and the better the performance.

However, a smaller manufacturing process requires more advanced materials and equipment, resulting in more R&D and production costs.

“According to TSMC’s layout, production of 3nm chips in the United States is primarily to supply products that Washington deems more sensitive and must be manufactured domestically. We will maintain our production capacity and the cost of production in Taiwan will be lower,” said Hsu.

“Suppose the unit price of chips made in Taiwan is lower than that made in the United States. In that case, other countries will continue to prioritize purchasing from Taiwan, so that the production of the United States side will not affect Taiwan’s local production capacity. .”

Rita Huang, Sean Tseng, and Reuters contributed to this report.

Aldogra Fredry

Aldgra Fredly is a Malaysia-based freelance writer covering Asia Pacific news for The Epoch Times.