European Semiconductor Manufacturing Co. (ESMC), a joint venture involving TSMC, Bosch, Infineon Technologies, and NXP Semiconductors, is preparing land for a new semiconductor fabrication plant near Dresden, Germany.

The construction of this facility is backed by a substantial investment of €10 billion, with TSMC contributing €3.5 billion alongside European manufacturers Infineon and NXP.

As the world's largest semiconductor manufacturer, TSMC's new factory will mark its first production site in Europe, expanding its operations beyond Taiwan and China.

The German government is making a historic investment of €5 billion in the project, covering half of the total costs, which underscores the significance of this initiative.

Production at the new facility is anticipated to commence by the end of 2027, creating at least 2,000 new jobs and potentially an additional 8,000 jobs in the supply chain.

This investment is part of Germany's broader goal to produce one-fifth of the world's semiconductors by 2030, a response to disruptions during the Covid-19 pandemic and rising geopolitical tensions.

The increasing demand for computer chips, driven by digitalization and the transition away from fossil fuels, has prompted the EU's 'Chips Act' aimed at doubling Europe's semiconductor production by 2030.

Chancellor Olaf Scholz defended the substantial subsidies for the project, emphasizing their importance in securing semiconductor access for German companies and creating sustainable jobs.

TSMC's Chairman & CEO C.C. Wei highlighted the fab's role in addressing the semiconductor needs of Europe's automotive and industrial sectors, which is crucial for regional economic development.

The groundbreaking ceremony for the facility was attended by key figures including TSMC CEO C.C. Wei, German Chancellor Olaf Scholz, and EU Commission President Ursula von der Leyen.

Despite criticisms from the AfD party regarding government-sponsored projects, their state candidate acknowledged the semiconductor factory as a significant success for Dresden.

Scholz called for continued openness to investments and a forward-looking attitude in Germany, opposing nationalism and fostering a supportive environment for future opportunities.