Asia’s dominance of the semiconductor industry is overwhelming. Currently this continent produces 90% of memory chips, 75% of microprocessors and 80% of silicon wafers, which places Europe and the US in a position of dependence which in the medium term can be counterproductive. In these circumstances, the Old Continent needs to consolidate and develop its position in the semiconductor industry.
On February 8, 2022 Ursula von der Leyen, the president of the European Commission, announced that Europe wants to be a fundamental player in this market, and the first step to achieve this requires manufacturing20% of the planet’s chips in 2030. The Chips Act Directive mobilizes up to 43 billion euros between public and private investment to make it possible, so that a part of that money is allocated to the subsidies received by large semiconductor manufacturers to develop new cutting-edge plants in Europe.
The countdown begins to start the construction of the TSMC factory in Dresden
The negotiation that the German Government has had with Intel and TSMC to consolidate the construction of their cutting-edge plants on German soil has not exactly been a bed of roses. The managers of these two companies know perfectly well that Europe needs your complicity to achieve the objectives that have been set during this decade in terms of integrated circuits, and they have taken advantage, as can be expected, of their position of strength to negotiate hard some very juicy subsidies.
The TSMC plant that will be housed in Dresden will presumably cost 10 billion euros
The German Administration has confirmed that it will dedicate 22 billion euros to providing direct incentives to chip manufacturers. The TSMC plant that will be located in Dresden will presumably cost 10 billion euros, and spokespeople for this Taiwanese company aim to obtain a subsidy of 50% of the total cost. We do not know if they have finally achieved their purpose, but it is likely that this is the case because it has just been made official that the start of construction of this plant will take place during the second half of 2024.
It is good news for both Germany and Europe. The construction and commissioning of a cutting-edge integrated circuit factory requires investing between three and four years of work, so this plant will probably be able to start chip production in 2027or, at most, in 2028. However, it is important that we do not overlook that the TSMC factory in Dresden is not the only pillar of the European strategy in the field of the semiconductor industry.
The factory that Intel will build in Magdeburg will cost 30 billion euros and will receive a subsidy of 10 billion. This American company has also confirmed that it will spend $4.6 billion on new facilities that will be located in Wrocław (Poland), as well as a further $13 billion on the expansion of its factory in Leixlip (Ireland). The purpose of the improvement of this last plant will be to double its manufacturing capacity and enable a factory prepared to increase chip production in the Intel node 4. The reality is unappealable: Intel and TSMC have a good grip on Europe by the lapel. And, despite everything, the Old Continent should feel grateful.
