TSMC Moves to Preoccupy EU Market Eyeing EU Semiconductor Act

Taiwan’s TSMC has secured an advantageous position to preoccupy the EU market with the countdown to the passing of an EU version of America’s Chips Act to give chipmakers subsidies of about 60 trillion won.

According to Taiwanese media outlets on April 10, a number of TSMC partner companies have recently been asked to submit their first quotations for equipment, consumables, and factory facilities to be sent to Germany. They emphasized that TSMC requested similar documents from suppliers before announcing an Arizona plant construction project in the United States. They analyzed that TSMC put its Dresden semiconductor plant construction project in Germany into a mature stage.

Previously, TSMC announced that it would establish a semiconductor plant in Germany and has had detailed negotiations. The industry believes that Dresden, Germany, is a strong candidate.

In particular, as the final approval is likely to be given to the EU version of the Chips Act on April 18, analysts say that TSMC will officially confirm the construction of the German plant sooner or later. According to foreign media outlets such as Reuters, member states of the European Union (EU) will finalize approval after discussing the details of the budget of the EU Semiconductor Act in a monthly meeting of the European Parliament to be held in Strasbourg, France on April 18.

The main goal of the EU Semiconductor Act is to pay 43 billion euros (about 62 trillion won or US$47 billion) to strengthen semiconductor competitiveness in Europe. Originally, the act would pay the money only to high-tech semiconductor plants, but EU member states expanded the financial support for all industries related to semiconductors, including the old process production, research, and development (R&D), and design sectors.

Following the U.S. Chips Act, South Korea, Taiwan, and Japan are also passing bills to attract semiconductor production facilities to their countries one after another, so the EU is expected to pass the EU Semiconductor Act quickly as well. Some observers predict that there will be an announcement related to Dresden, Germany at TSMC’s corporate briefing scheduled for April 20.

In response, Samsung Electronics plans to build the world’s largest system semiconductor cluster based in Yongin, Korea by 2042. But TSMC’s investment in production facilities is more aggressive, which is expected to increase the burden on Samsung, which has set a goal of becoming the No. 1 system semiconductor in the world by 2030.