TSMC wants to work on the European market as they plan their upcoming factories.
Taiwan Semiconductor Manufacturing Co. (TSMC) is planning to build many plants in Europe with a focus on the market for artificial intelligence chips as the chipmaker broadens its global reach.
Taiwan’s National Science and Technology Council Minister Wu Cheng-wen stated that they have begun work on the first factory in Dresden and are already planning the upcoming five fabs for different market sectors.
Wu did not provide a timeframe for the upcoming expansion of Taiwanese chipmakers in Europe. In an email, TSMC stated that it has no fresh investment plans and is still committed to its present worldwide global initiatives.
The biggest chipmaker in the world, TSMC, which produces most of its semiconductors in Taiwan, is investing tens of billions of dollars to set up new sites in the US, Japan, and Germany. It is done partly as a precaution against raising geopolitical tensions with China.
It began constructing its first factory in the European Union in August, a €10 billion ($10.9 billion) chip fabrication unit in Dresden, Germany. The project will begin by the end of 2027, with half of the project funding covered by the state.
According to Wu, the AI industry will be the most important market, including the chips for the US-based Nvidia Corp. and Advanced Micro Devices Inc. However, TSMC may also find chances with other semiconductor companies of different designs. The growing need for these chips, which are necessary for AI and advanced computing applications, puts TSMC in a position to influence shaping technology in the future.
TSMC wants to work on the European market as they plan their upcoming factories. The company will also decide whether to expand in Dresden or build in other EU countries.
Many chip designers from the next generations have emerged in Europe, including Germany’s Black Semiconductor and the Netherlands’ Axelera AI. However, established European chipmakers like NXP Semiconductors NV and Infineon Technologies AG have focused primarily on mature technologies for the industrial and automotive sectors.
These developments offer TSMC multiple opportunities to work with businesses and satisfy increasing demand, particularly in the market for AI chips.
The overseas factories of TSMC are opening opportunities for countries and cities nearby to attract investments from its suppliers. Given the recent strengthening of relationships between Taipei and Prague, the Czech Republic appears to be the winner for the Dresden site.
Wu claims that the Taiwanese government is encouraging TSMC suppliers to invest in a location near Dresden in the Czech Republic. According to him, he is also trying to help academics in Taiwan and the Czech Republic with joint research and development projects.
The TSMC is expanding its production locations to lower the risk due to the ongoing tensions between China and Taiwan. TSMC’s growth was propelled not only by market opportunities but also due to geopolitical factors.
Prague maintains official diplomatic connections with Beijing, and it has been establishing closer commercial and social ties with Taipei. Over the past year, Wu and other prominent Taiwanese officials have visited the Czech Republic. Tsai Ing-wen, the former president of Taiwan, is also in the country as a part of the first stop of her European tour.
Wu also stated that he believes Taiwanese semiconductor companies will be under more pressure to grow in the US, irrespective of the results of the November presidential election. TSMC has so far committed more than $65 billion to the construction of three factories in Arizona.
According to him, Taiwanese companies may face short-term difficulties due to the higher relocation costs. However, it can benefit them in the long run since they can become better versions of themselves.