Yi-Chieh Chen and Chung-min Tsai
Introduction
Taiwan Semiconductor Manufacturing Company (TSMC) has led the expansion of Taiwan’s semiconductor industry into Europe through its investment in Germany. In August 2023, TSMC announced its investment in European Semiconductor Manufacturing Company (ESMC), a joint venture with Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. In August 2024, the European Commission (EC) approved €5 billion in German state subsidies to support the construction and operation of the €10 billion manufacturing plant in Dresden.1 Former German Chancellor, Olaf Scholz, and President of the European Commission, Ursula von der Leyen, attended the groundbreaking ceremony for ESMC’s fab.2 Dresden, the capital of a region known as Silicon Saxony, was chosen for its role as Europe’s semiconductor manufacturing hub. The region is home to major semiconductor companies, including Infineon, Bosch, and GlobalFoundries, and comprises a cluster of over 2,500 companies.
The EU views the establishment of a fab in Germany with a potential supply chain connected to neighboring countries like the Czech Republic as a promising project, though concerns remain about its feasibility and long-term impact. This issue brief examines the challenges ESMC faces in achieving profitability and sustainability by analyzing the political factors driving Taiwan’s semiconductor firms’ international expansion, TSMC’s struggles to navigate the business environment in Germany, and the hesitation of TSMC’s suppliers to expand in the EU.
No comments:
Post a Comment