TSMC, Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. have announced a joint investment in the European Semiconductor Manufacturing Company (ESMC) GmbH located in Dresden, Germany. This strategic move intends to provide advanced semiconductor manufacturing services and serve the increasing capacity needs of the rapidly growing automotive and industrial sectors in Europe. However, the final investment decision is subject to confirmation of the level of public funding as part of the European Chips Act framework.

The planned fab is projected to have a monthly production capacity of 40,000 300mm (12-inch) wafers, utilizing TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology. This initiative aims to enhance Europe’s semiconductor manufacturing ecosystem with advanced FinFET transistor technology and create approximately 2,000 high-tech professional jobs. The construction of the fab is expected to commence in the second half of 2024, with production targeted to begin by the end of 2027.

In the proposed joint venture, TSMC will hold a 70% ownership stake, while Bosch, Infineon, and NXP will each have a 10% equity interest, pending regulatory approvals and meeting other conditions. The total investment is anticipated to exceed 10 billion euros, including equity injection, debt borrowing, and substantial support from the European Union and the German government. TSMC will oversee the operation of the fab.

Dr. CC Wei, Chief Executive Officer of TSMC, expressed TSMC’s dedication to meeting the strategic capacity and technology needs of its customers, emphasizing the company’s enthusiasm for strengthening its partnership with Bosch, Infineon, and NXP. He also highlighted the potential of Europe for semiconductor innovation, particularly in the automotive and industrial arenas.

Dr. Stefan Hartung, chairman of the Bosch board of management, underlined the critical role of semiconductors for Bosch and the global automotive industry, emphasizing the importance of reliable semiconductor availability and secure supply chains.

Jochen Hanebeck, CEO of Infineon Technologies, noted the significance of the joint investment in bolstering the European semiconductor ecosystem. The new capacity is expected to cater to the growing demand from European customers, particularly in automotive and IoT sectors, while facilitating the development of innovative technologies to address global challenges.

Kurt Sievers, President and CEO of NXP Semiconductors, underscored NXP’s commitment to enhancing innovation and supply chain resilience in Europe. He expressed gratitude to the European Union, Germany, and the Free State of Saxony for recognizing the critical role of the semiconductor industry and their commitment to boosting Europe’s chip ecosystem.

The joint investment in ESMC signifies a major step towards strengthening the semiconductor manufacturing landscape in Europe, showcasing the commitment of these industry leaders to drive innovation, address capacity needs, and fortify the region's position in the global semiconductor market.