Dresden gears up: TSMC, Bosch, Infineon, and NXP announce joint semiconductor investment

In a monumental move strengthening the European semiconductor arena, global tech leaders including TSMC, Robert Bosch, Infineon Technologies, and NXP Semiconductors have unveiled their strategic blueprint to collectively funnel their resources into the European Semiconductor Manufacturing Company (ESMC) GmbH, based in Dresden, Germany. This collaboration, part of the European Chips Act framework, is prepping the foundation for a 300mm fab which is poised to address the spiraling demand in the automotive and industrial domains. However, a green signal on this deal awaits validation of the public funding aspect.

The forthcoming fab, governed by TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process tech, holds the promise of a whopping 40,000 300mm monthly wafer production capacity. This not only bolsters Europe’s semiconductor manufacturing prowess with cutting-edge FinFET transistor technology but is also a beacon of employment, opening the gates for approximately 2,000 direct high-tech job opportunities. The construction of this behemoth is set to commence in the latter half of 2024, aiming for production to kick off by the close of 2027.

TSMC-led Consortium Sets Eyes on Dresden for Semiconductors, Aiming at €10bn. Photo courtesy of Robert Bosch GmbH.

Deciphering the Equity Blueprint

Delving into the ownership details, TSMC emerges as the dominant stakeholder, claiming a 70% ownership slice. Meanwhile, Bosch, Infineon, and NXP are on a level playing field, each holding onto a 10% equity stake. However, this joint venture, expected to exceed an investment envelope of 10 billion euros, hangs in the balance awaiting regulatory nods and meeting certain criteria. The financial composition includes equity injections, debt borrowing, and robust backing from the European Union and the German government. TSMC stands out as the designated operator of the fab.

TSMC’s CEO, Dr. CC Wei, emphasized, “This investment in Dresden demonstrates TSMC’s commitment to serving our customers’ strategic capacity and technology needs, and we are excited at this opportunity to deepen our long-standing partnership with Bosch, Infineon, and NXP.”

Echoing these sentiments, Bosch board’s chairman, Dr. Stefan Hartung, and the CEOs of Infineon Technologies and NXP Semiconductors, Jochen Hanebeck and Kurt Sievers respectively, highlighted the criticality of this move in solidifying the semiconductor ecosystem, particularly spotlighting Dresden’s evolving role in this global industry.