Construction of TSMC's German plant to begin at the end of the year, local government is investing heavily to improve infrastructure
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Update time : 2024-03-06 18:00:28
TSMC's German plant started construction at the end of the year, and the government of Saxony is currently investing heavily in improving infrastructure such as water and electricity supply and high-speed networks.
TSMC's decision to establish a factory in Germany is not accidental, but there are some obvious factors involved. Firstly, the German government has pledged to invest 5 billion euros to support the construction of TSMC's factory in Germany and to locate it in the eastern city of Dresden. This huge financial support undoubtedly provides strong financial support for TSMC to establish factories in Germany. In addition, as the largest economy in Europe, Germany has abundant technical talents and advanced manufacturing processes, which is also one of the reasons why TSMC chose to establish a factory in Germany.
However, TSMC's decision also brings some potential risks and challenges. Although the large financial support from the German government can provide financial security for TSMC, it has also raised some doubts. Some people are concerned that TSMC may overly rely on government funding, lack autonomy and flexibility in its operations, and may even be subject to government intervention. Moreover, Germany's talent reserve in the semiconductor field is relatively scarce, and the industrial agglomeration effect is relatively weak, which may have a certain impact on TSMC's production and operation. In past experience, TSMC faced similar issues during its establishment in the United States. Cultural differences, talent shortages, and other factors have had a profound impact on the operation of enterprises. Similarly, in the process of setting up factories in Germany, TSMC may also face similar challenges. Different cultural backgrounds, differences in labor markets, and other factors may have a certain impact on TSMC's operations.
Previously, Chairman Liu Deyin stated at a press conference that the progress of the German factory will proceed according to the original plan. The factory will mainly respond to automotive and industrial needs, and will receive support from joint venture partners, the German state government, and the municipal government. Construction will begin as scheduled in the second half of 2024.
TSMC's German factory has a land area of up to 52.7 hectares, which has been reserved for future expansion. The Dresden city government in Germany has assessed that the demand for industrial water in the area may double in the next 20 years. Therefore, the public company Sachsenergie has invested 70 million euros in 2023 to upgrade its existing water supply system, and is expected to spend more than 200 million euros in the next few years to build a new water plant specifically for industrial use.
In addition, in order to treat a large amount of industrial wastewater, the Dresden government also needs to build a new industrial wastewater drainage system, which is expected to be completed in two stages before 2026. In addition to water demand, the huge demand for electricity is also a major challenge. Saxony Energy Company hopes to build a new substation covering an area of 20 hectares, but the adjacent space of the industrial area is limited, and the location of the substation is expected to be finalized in March 2024.
It is reported that on August 8, 2023, TSMC officially announced its joint investment in European Semiconductor Manufacturing Corporation (ESMC) with Bosch, Infineon, and NXP. The location of this 12 inch wafer factory was chosen in Dresden. ESMC plans to start construction of the wafer factory in the second half of 2024, with the goal of starting production by the end of 2027. The expected monthly production capacity is 40000 12 inch wafers, which can provide TSMC's 28/22 nanometer planar CMOS process and 16/12 nanometer FinFET process, and directly create about 2000 high-tech professional job positions. The wafer factory has raised funds through various means such as equity injection, borrowing, and support from the EU and German governments, with a total estimated investment amount exceeding 10 billion euros. TSMC will hold 70% of the shares in the joint venture and be responsible for its operations, with Bosch, Infineon, and NXP each holding 10%. TSMC estimates that the investment amount will not exceed 3.885 billion US dollars.
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