TSMC’s European plant will receive all of the promised 5 billion euros in subsidies

The official ceremony of laying the foundation of the first TSMC enterprise in Europe took place back in August of this year, but the project at that time was not guaranteed to be provided with subsidies from the regional authorities. According to German media, the subsidies were only approved towards the end of last week. Construction participants will receive 5 billion euros of financial support, which will cover half of the construction costs of the enterprise.

Image source: ESMC

In addition to TSMC, which received a 70% stake in the joint venture and will invest 3.5 billion euros, shareholders include European chip makers Bosch, NXP Semiconductors and Infineon Technologies. Each of the three listed companies will receive 10% of the shares of the joint venture and will invest 500 million euros. Thus, the total costs of investors will amount to 5 billion euros, the same amount will be covered by subsidies from the European authorities. Half of the investment is a fairly high percentage of subsidies, which Intel, which intended to build two chip production plants in Magdeburg, Germany, could not achieve at the approval stage. The processor giant was offered 10 billion euros in subsidies, but this amount would cover only a third of construction costs.

According to Heise, representatives of the German Ministry of Economic Affairs and Climate Protection said on Friday that they had finally signed a contract with the four shareholders of ESMC – this is the name of the TSMC joint venture, which will be built in Dresden and will master the production of chips using mature technological processes in the range from 28 to 12 nm. Subsidies will be provided to project participants as progress is made in its implementation. The ESMC facility will employ at least 2,000 employees and will be able to process 500,000 silicon wafers annually. In moments of crisis, expressed in growing demand for chips, it will have to give priority to fulfilling orders for the supply of chips to Germany and the EU. This is the first project that the EU authorities have undertaken to subsidize under the so-called “European Chip Law”.