The chairman of TSMC said on Monday that the company has begun to consider building a fab in Germany, which is its first manufacturing plant in Europe. The decision will depend on the needs and requirements of TSMC’s customers, and the cost of the facility will be shared by TSMC, its customers, and/or local or state governments.
TSMC Chairman Mark Liu said at the company’s annual shareholder meeting: “We are in the preliminary stage of reviewing whether to go to Germany.” Nikkei“It’s too early, but we are seriously evaluating it, and [a decision] Will depend on the needs of our customers. ”
As the world’s largest semiconductor contract manufacturer, TSMC has hundreds of customers, many of which are in Europe. The global chip shortage and geopolitical tensions have caused many, if not all, to consider the risks associated with only producing chips in Taiwan.
“We continue to communicate with major customers in Germany to see if this is the most important and effective for our customers,” Liu said in the report Reuters“Customers are the backing of our global expansion. We will act very cautiously.”
Recently, the company started building its N5 (5nm) wafer fab in Arizona. Mass production of chips will begin in the first quarter of 2024The fab is funded by TSMC and supported by the US federal government and the state of Arizona. The fab has a capacity of approximately 20,000 300mm wafers per month, but if TSMC’s customers in the United States need more, TSMC can build more modules at the same location to increase production.
Europe is not a major chip development center. Designs developed in the EU rarely require TSMC’s well-known leading process technology, so it doesn’t make much sense to build semiconductor production facilities in Europe that support N3 or N2 (3 nanometers or 2 nanometers) (and this is what European bureaucrats want). Nevertheless, in the automotive and telecommunications sectors, enough European companies use TSMC’s advanced and mature nodes. These companies may be interested in making chips closer to home.
But there is a problem. Although semiconductors themselves can be produced almost anywhere, TSMC’s testing and packaging facilities are all in Taiwan. There are independent outsourced semiconductor assembly and test (OSAT) companies that provide similar services, but they are also located in Taiwan, China, or other Asian countries. Therefore, although the chips can be manufactured in Europe, they must be shipped to Asia for testing and assembly, and then sent back to Europe for use. At present, TSMC has not talked about building packaging plants in Europe, but if TSMC customers want to eliminate geopolitical risks, it seems that they need to localize the entire supply chain.