The board of Taiwanese chipmaker TSMC this week voted to invest €3.5bn in a factory in the east German city of Dresden.
It said this investment would probably rise to €10bn over time, consisting of equity, loans and “strong” support from the EU and the German government
According to reports in the German press on Monday, Berlin will make €5bn available to support the project.
The factory will be owned by the European Semiconductor Manufacturing Company, which will be 70% owned by TSMC.
German firms Bosch and Infineon Technologies and the Netherlands’ NXP Semiconductors will each have a 10% stake.
TSMC, the world’s largest chip fabricator, has been in talks for two years with the German state of Saxony over the Dresden plant.
When complete in 2027, it will have a monthly production capacity of 40,000 300mm wafers.
Germany plans to invest around €20bn on the semiconductor sector to lower its dependency on East Asian countries.
Intel recently announced it will spend more than €30bn euros to develop two chip-making plants in Magdeburg (see further reading).
In addition, Infineon is building a €5bn semiconductor plant in Dresden, due to start production in 2026.
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