Taiwan Semiconductor Manufacturing Company (TSMC) has begun the initial phase of construction for its first semiconductor fabrication plant in Dresden, Germany.  

Established last year, TSMC formed a joint venture with Bosch, Infineon, and NXP for the plant. 

The announcement follows the European Commission’s (EC) approval of a €5bn ($5.56bn) German measure to support the project under EU State aid rules.  

With a projected monthly output of 40,000 300mm wafers, the facility will utilise TSMC’s advanced process technologies, enhancing the region’s capabilities in the field-effect transistor technology. 

The total investment for the German plant is set to surpass €10bn, encompassing equity, debt, and financial support from both the European Union and the German government.  

The Dresden facility is not only expected to create approximately 2,000 direct high-tech jobs but also aims to produce an annual yield of 480,000 silicon wafers upon reaching full capacity by 2029. 

The EC highlighted the plant’s open foundry model, which will allow various customers, including its shareholders, to commission specific chip productions.  

This model is particularly beneficial for the EU’s technological ecosystem, as the TSMC joint venture has pledged to support European small and medium enterprises (SMEs) and startups, enhancing their technical expertise and capabilities, the commission added. 

Moreover, the plant will extend special production capacity access to SMEs and European academic institutions, fostering research and knowledge development within the continent.  

TSMC chairman and CEO CC Wei said: “Together with our partners, Bosch, Infineon and NXP, we are building our Dresden facility to meet the semiconductor needs of the rapidly growing European automotive and industrial sectors . 

“With this state-of-the-art manufacturing facility, we will bring TSMC’s advanced manufacturing capabilities within reach of our European customers and partners, which will stimulate economic development within the region and drive technological advancements across Europe.” 

TSMC, which owns a 70% stake in the joint venture, will oversee the plant’s operations, with Bosch, Infineon, and NXP each owning a 10% share.