TSMC Rules Out European Chip Factory For Now
Bad news for EU chip manufacturing ambitions, as TSMC says there are no ‘concerte’ plans to build any factories in Europe
Chip contracting giant Taiwan Semiconductor Manufacturing Co (TSMC) has dashed European hopes of constructing a chip factory in the bloc.
The firm on Wednesday said it has no concrete plans for factories in Europe, Reuters reported, rebuffing the prospect of Taiwanese tech firms making advanced semiconductors in the European Union.
According to Reuters, Taiwan and the EU held high level trade talks last week with chip co-operation at the top of the agenda.
European ambitions
Europe has been courting TSMC and other chip makers such as Intel for a while now, but the world’s largest contract chipmaker and Asia’s most valuable listed company, has been reluctant to commit to a European factory.
EU hopes were raised in April 2021, when TSMC pledged a huge $100 billion into bolster advanced chip making over the next three years in order to keep up with rising demand around the world,
But in July 2021 TSMC’s founder, Morris Chang, said plans by the US and EU to bring semiconductor production into their own countries could result in a costly, unworkable system.
There was also media report that TSMC was considering building its first European semiconductor plant in Germany.
But TSMC’s dismissed this, and said reports of it eyeing building chip factories in Germany was “too early to say”.
And now TSMC has given its clearest indication that there is no plans for any European fab.
“In Europe, we have relatively fewer customers, but we are still assessing and still do not have any concrete plans,” Chairman Mark Liu told an annual shareholders’ meeting.
Japan, United States
It should be noted however that TSMC has built chip factories outside of Taiwan before.
Last October for example TSMC confirmed it was building a chip factory in Japan in conjunction with Sony Corp and the Japanese government.
The Taiwanese giant is also spending $12 billion on chip factories in the United States to help alleviate the global chip shortage.
Liu said this week that TSMC is seeing higher costs for its US expansion than estimated. “But we can handle it,” he reportedly said.
TSMC also said it expects revenue growth of around 30 percent this year, at the upper end of an earlier forecast, as the chip shortage keeps order books full and prices high.
EU chip ambitions
The EU has been seeking to encourage chip firms to build fabs in the bloc for a while now.
In March 2021 the European Union under its 2030 Digital Compass plan announced it wanted to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade.
In September 2021, the EC plan was first announced by Ursula von der Leyen.
The proposal, known as the ‘European Chips Act’, is a way to bolster Europe’s self sufficiency in the semiconductor sector, by easing state aid rules, improving tools to anticipate shortages and crisis, and strengthen research capacity in the bloc.
In February, the EU officially unveiled the European Chips Act, with the bloc mentioning Taiwan as one of the “like-minded partners” Europe would like to work with.
