Chipmaker Taiwan Semiconductor Manufacturing Company Ltd (TSMC) is in advanced talks with suppliers about setting up its first European plant in the German city of Dresden, the Financial Times reported on Friday.
TSMC is sending a team of senior executives to Germany early next year to discuss the level of government support and the capacity of the local supply chain to meet the prospective plant’s needs, the report said, citing people familiar with the matter.
TSMC said in a statement responding to the report: “We do not rule out any possibility but there is no concrete plan at this time.” It did not elaborate.
The Financial Times did not specify whether any government support would be federal, regional or local.
The east German state of Saxony, of which Dresden is the capital, said it was always in talks with leading companies in the microelectronics industry but the companies themselves make decisions about new locations.
“In that sense, Saxony supports these companies with the aim of further strengthening Silicon Saxony as a high-tech location,” the state government said.
Taiwan and the European Union held high-level trade talks in June. Less than a week after that meeting, TSMC said it had no concrete plans for factories in Europe.
But TSMC, the world’s largest contract chipmaker and Asia’s most valuable listed company, flagged last year that it was in the early stages of reviewing a potential expansion into EU member Germany.
The Taiwanese company’s talks with several materials and equipment suppliers are focused on whether they can also make the investments required to support the plant, the FT said, adding that if it presses ahead with a Dresden plant, it would focus on 22-nanometre and 28-nanometre chip technologies.
Under the European Chips Act, the European Commission has earmarked 15 billion euros ($15.90 billion) for public and private semiconductor projects by 2030 and to double Europe’s share of the highly competitive chip market.
TSMC is also building a plant in Japan.
The secretary-general of a Japanese ruling party lawmakers’ group on chip strategy said on Friday he believed TSMC is considering a second chip plant in the country.
TSMC said it also did not rule out any possibility for Japan but that there were no concrete plans.
Earlier this month, TSMC said it would more than triple its planned investment at its new Arizona plant to $40 billion, among the largest foreign investments in U.S. history.
The company expects its Phoenix factories to create 13,000 high-tech jobs, including 4,500 under TSMC and the rest filled by suppliers.
($1 = 0.9431 euros) (Reporting by Rhea Binoy in Bengaluru and Christina Amann in Berlin; Additional reporting by Ben Blanchard; Editing by Rashmi Aich, Sam Holmes and Barbara Lewis)