TSMC and Germany discuss the construction of potential new chip plant

Ever since it started, the chip shortage issue persists to this day and has proven to be a real problem for virtually all parties involved—from the manufacturer to the consumer of the end product. Consequently, it’s become crystal clear for both the companies that make the chips, as well as the governments whose economies are dependent on them, that action must be taken.

As a prime example of that fact, the Taiwan Semiconductor Manufacturing Co. (TSMC)—the world’s largest contract chipmaker—has started negotiations with the German government to potentially build a new semiconductor plant on the country’s grounds. (via Bloomberg)

Originally, before the pandemic days, TSMC had most of its plants based in Taiwan where the company originated and is based. However, due to the dramatically rising demand for chips during the past year or two the chip manufacturing giant has started to look towards other regions as well.

Currently, TSMC is already building a facility in Arizona for $12 billion and is set to start construction on another one in Japan for $7 billion soon. In other words, its discussion with Germany does not come as much of a surprise but is rather to be expected.

TSMC’s Senior Vice President of Europe and Asia Sales, Lora Ho, stated that factors such as customer demand, talent pool, and government subsidies will all influence the company’s final decision. The location and incentives are yet to be discussed between the two parties, adds Ho.

Mark Liu, TSMC’s chairman, told shareholders in June that the company has already started the process of establishing its first plantations in Europe.

It is also worth mentioning that all of this is going on, while the EU is set to put in motion its European Chips Act during the first half of 2022. The hope is to boost the production of semiconductors and contribute 20% of the global chip manufacturing by 2030.