2024-08-20 12:50:00
Electronic components production in Europe gets underway for thea Taiwan Semiconductor Manufacturing Company (TSMC). The world’s number one semiconductor company broke ground on Tuesday for its first European factory in Germany. German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen were in Dresden for the symbolic groundbreaking ceremony, alongside executives from the Taiwanese group.
The group plans to invest 3.5 billion euros in this plant, of which it will hold 70% of the capital, in partnership with the Dutch groups NXP and the German groups Infineon and Bosch, each involved at 10%. The total investments of this flagship project, located in the ” Silicon Saxony “, an industrial center dating from the communist period and dedicated to semiconductors, will reach 10 billion euros, according to the four partners.
The German plant will specialize in the production of semiconductors for the automotive sector, a flagship branch of German industry, engaged in a historic shift towards electrical technologies. The goal is to start production by the end of 2027. The plant should have a monthly production capacity of 40,000 300 mm silicon wafers, one of the most advanced technologies. Some 2,000 direct jobs are to be created.
Securing supplies
« So far, these technologies have mainly been imported from Asia and the USA. The project therefore makes a significant contribution to Europe’s security of supply and technological sovereignty. “, commented the Minister of Economy, Robert Habeck in a press release.
The vast majority of chip manufacturing is currently located in Asia, particularly Taiwan. But due to the disruptions in the supply chain that created a shortage of components following the health crisis and the threat of an invasion of the island claimed by China, Western countries want to develop production on their own soil. And for good reason: chips have become essential in all global industries, from laptops to wind turbines to missiles.
Berlin has therefore spared no expense in attracting TSMC: up to five billion euros in subsidies have been allocated to the project. Announcements of factory openings, accompanied by billions of euros in investments and subsidies, have multiplied throughout Germany over the past three years, from Intel to Wolfspeed, via Globalfoundries.
For its part, in July, theThe European Commission, within the framework of the European Semiconductor Joint Undertaking, has announced the launch of several calls for projects. The total European Union funding for these calls amounts to €325 million. The projects should concern competence centres, a cloud-based semiconductor design platform and innovative projects in photonics.
This willingness of the European Union to finance projects linked to semiconductors stems from the ” Chips Act », European regulation adopted last April by the EU. It sets the target of doubling the EU’s current market share by the end of the decade, i.e. from around 10% of the global market to 20% by 2030. As a result, production will have to be multiplied by four.
TSMC plays geographic diversification
TSMC has also embarked on a diversification of its industrial sites, with factory projects outside Taiwan. For the company, it is also a question of protecting its activities currently concentrated on the island threatened by the Chinese army… while benefiting from billions of euros in subsidies.
So this year it decided to build three factories on American soil to produce cutting-edge chips. Gina Raimondo, Secretary of Commerce, assured in April that TSMC would create ” at least 6,000 direct jobs “in these factories,” more than 20,000 jobs » for construction and « tens of thousands of indirect jobs ».
Lael Brainard, Joe Biden’s top economic adviser, also clarified in April that the investment envisaged by TSMC was based on a preliminary agreement with the Department of Commerce, linked to a major technology investment law, the ” Chips and Science Act “Under the agreement, the Taiwanese company will receive up to $6.6 billion in direct financing and will be able to benefit from an additional $5 billion in loans.
Sunder pressure from its customers – but also governments -, the Taiwanese also inaugurated, at the end of February, a mega-factory in Japan – for a cost equivalent to 8 billion euros – subsidized at more than 40% by Japan, which wishes to revitalize its semiconductor industry.
TSMC Sees Revenue Soar Thanks to AI
The Taiwanese giant reported strong growth in its second-quarter revenue in early July, reaching NT$673.51 billion (€19.11 billion), according to calculations by the Reuters news agency, based on monthly company publications. In June alone, TSMC recorded an increase of 33% of its turnover over one year.
The group did not provide any other details in its brief earnings statement, however, such as net profit. According to an LSEG SmartEstimate, it should have increased by 30% year-on-year. Between January and March, it had increased by 9%, to 225.4 billion Taiwan dollars (6.39 billion euros).
TSMC’s results are particularly benefiting from the rise of artificial intelligence (AI). And for good reason, this technology is particularly hungry for semiconductors to function – just like many everyday consumer products, ranging from kitchen appliances to cell phones, cars and weapons.
With the generative AI revolution, sparked less than two years ago by the success of ChatGPT, TSMC has seen its business accelerate again, for cutting-edge semiconductors needed to train AI models and power applications.
(With AFP)
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