The pandemic triggered a significant semiconductor supply crisis due to widespread factory shutdowns in Asia, prompting the U.S. and E.U. to develop strategies to regain more control over global chip manufacturing. A couple of months after the U.S. government announced its plan to strengthen semiconductor supply chains, a major partnership was unveiled yesterday in Germany.
Infineon, TSMC, Bosch, and NXP are collaborating to invest in the European Semiconductor Manufacturing Company (ESMC) GmbH, located in Dresden, Germany. This partnership aims to advance semiconductor manufacturing and support the automotive and industrial sectors’ growing demand. The project’s success relies on public funding confirmation under the European Chips Act.
The planned ESMC facility will feature a 300mm fab capable of producing 40,000 300mm wafers per month using TSMC’s advanced 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology. This joint venture will bolster Europe’s semiconductor manufacturing ecosystem and create approximately 2,000 high-tech professional jobs. Construction is expected to begin in the second half of 2024, with production targeted for late 2027.
TSMC will hold a 70% ownership stake in the joint venture, while Bosch, Infineon, and NXP will each possess a 10% equity share, subject to regulatory approvals. The venture’s total investments, exceeding 10 billion euros, will come from equity injection, debt borrowing, and EU and German government support. TSMC will operate the fab.
“Our joint investment is an important milestone to bolster the European semiconductor ecosystem. With this, Dresden is strengthening its position as one of the world’s most important semiconductor hubs that is already home to Infineon’s largest frontend site,” said Jochen Hanebeck, CEO of Infineon Technologies. “Infineon will use the new capacity to serve the growing demand, particularly of its European customers, especially in automotive and IoT. The advanced capabilities will provide a basis for developing innovative technologies, products, and solutions to address the global challenges of decarbonization and digitalization.”