TSMC and Germany reported to close in on fab deal

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TSMC has selected the Dresden chip cluster to build a specialty fab, Chinese-language media outlet Commercial Times reported based on sources from the foundry’s supply chain. The company is unwilling to confirm the report, saying instead that it’s “studying the feasibility” of such a project. According to Reuters, talks between TSMC and the German state of Saxony are “at an advanced stage” and focused on government subsidies.

Credit: TSMC

Seeking to secure supply for its industries, the European Union has been courting the world’s largest chip manufacturers to set up shop in Europe. Intel was the first to bite, announcing an advanced fab in Magdeburg, although construction of the facility has been delayed while the amount of subsidies is being renegotiated. TSMC has started expanding internationally, but it has signaled Europe isn’t an interesting location for leading-edge manufacturing operations due to a lack of local customers.

For specialty processes, automotive applications in particular, there does seem to be a business case. Analysts predict the automotive semiconductor market will grow by high single to low double-digit percentages on average throughout the decade.