In a landmark move set to revolutionize Europe’s tech industry, global powerhouses TSMC, Bosch, Infineon, and NXP have joined forces to establish the European Semiconductor Manufacturing Company (ESMC) in Dresden, Germany. The joint venture, predominantly owned by TSMC, will construct a state-of-the-art 300mm fab to cater to the blossoming automotive and industrial sectors, beginning production by 2027.
- TSMC, Bosch, Infineon, and NXP have formed a joint venture called European Silicon-based Microelectronics and Computing Manufacturing Company (ESMC).
- ESMC aims to establish an advanced semiconductor fab in Europe with capacity of at least 20,000 wafers per month using the latest technology.
- The goal is to strengthen Europe’s electronics value chain by providing a secure chip supply and enabling the development of new products for automotive, IoT, and communication technologies.
Boasting a monthly production capacity of 40,000 300mm wafers, this future-proof facility will utilize TSMC’s cutting-edge 28/22 and 16/12 nanometer technology. With an investment surpassing €10 billion, backed by the European Union and German government, the initiative aims to fortify Europe’s semiconductor industry, creating 2,000 high-tech jobs and meeting the escalating demand of its European customers.
The joint venture is expected to bring a fresh wave of innovation and growth to the European tech industry, particularly the automotive and industrial sectors. The ESMC, with TSMC holding a 70% stake and Bosch, Infineon, and NXP each taking 10%, is set to construct a 300mm fab with a monthly processing capacity of 40,000 wafers.
The construction of the fab is planned to commence in the second half of 2024, with production expected to begin by the end of 2027. The project is an enormous financial undertaking, with total investments anticipated to exceed €10 billion. This sum includes an equity injection, debt borrowing, and financial support from the European Union and the German government.
Implication for Europe’s tech industry
The establishment of ESMC is a significant step towards strengthening Europe’s semiconductor manufacturing ecosystem. The high-tech fab is expected to create about 2,000 direct professional jobs in the tech industry. TSMC’s CEO, Dr. CC Wei, emphasized the company’s commitment to serving customers’ strategic capacity and technology needs, thereby contributing to the growth of the semiconductor industry in Europe. “Europe is a highly promising place for semiconductor innovation, particularly in the automotive and industrial fields, and we look forward to bringing those innovations to life on our advanced silicon technology with the talent in Europe.”
Automotive and industrial sectors as primary beneficiaries
The automotive and industrial sectors are set to be the primary beneficiaries of this venture. Bosch, a global leader in automotive components, highlights the importance of reliable semiconductor availability for the global automotive industry. The company believes that ESMC will play a crucial role in securing supply chains through collaboration. Dr. Stefan Hartung, chairman of the Bosch board of management, highlighted the critical role of semiconductors, not just for Bosch but also for the global automotive industry’s success. “With TSMC, we are pleased to gain a global innovation leader to strengthen the semiconductor ecosystem in the direct vicinity of our semiconductor plant in Dresden.”
Infineon Technologies, a global leader in semiconductor solutions, intends to use the new capacity to meet the growing demand of its European customers, especially in the automotive and Internet of Things (IoT) sectors. NXP Semiconductors, renowned for its secure connectivity solutions for embedded applications, underscores its commitment to strengthening innovation and supply chain resilience in Europe, particularly for the automotive and industrial sectors.
“NXP is very committed to strengthening innovation and supply chain resilience in Europe,” said Kurt Sievers, President and CEO of NXP Semiconductors. “We thank the European Union, Germany, and the Free State of Saxony for recognizing the semiconductor industry’s critical role and their commitment to boosting Europe’s chip ecosystem. The construction of this new and significant semiconductor foundry will add much-needed innovation and capacity for the range of silicon required to supply the sharply increasing digitalization and electrification of the automotive and industrial sectors.”
A boost to Dresden’s semiconductor center
The joint venture will also bolster Dresden’s position as a major semiconductor center. Dresden, often referred to as ‘Silicon Saxony’, is home to more than 2,300 companies, research institutes, and universities, making it one of the top five ICT locations in Europe. The presence of ESMC will further enhance Dresden’s global standing in semiconductor research and manufacturing.
Digitalization and electrification
The joint venture is expected to meet the automotive and industrial sectors’ increasing digitalization and electrification needs. As these sectors evolve, the demand for advanced semiconductors is projected to escalate. The ESMC, with its cutting-edge technology, is well-positioned to meet these demands and drive the digitalization and electrification of various sectors forward.
- TSMC has been at the forefront of the semiconductor foundry business since its inception in 1987. In 2022, TSMC introduced 288 distinct process technologies and manufactured products for 532 customers. The company is headquartered in Hsinchu, Taiwan.
- NXP Semiconductors is a global leader in secure connectivity solutions for embedded applications, driving innovations in various sectors, including automotive, industrial & IoT, mobile, and communication infrastructure. In 2022, the Eindhoven-based company reported a revenue of $13.21 billion.
- Bosch is a global technology and services provider with operations spanning four business sectors: Mobility, Industrial Technology, Consumer Goods, and Energy and Building Technology. The company reported sales of 88.2 billion euros in 2022.
- Infineon Technologies AG is a global semiconductor leader in power systems and IoT, with a revenue of about €14.2 billion in the 2022 fiscal year.