TSMC feeling ‘good’ about possible Germany plant, in talks on subsidies

TAIPEI (Reuters) – Taiwanese chipmaker TSMC is feeling “good” about talks over a possible first European factory in Germany and is discussing subsidies with the host country’s government, the company’s chairman said on Tuesday.

TSMC, the world’s largest contract chipmaker, has been in talks with the German state of Saxony since 2021 about building a fabrication plant, or “fab,” in Dresden.

The European Union has approved the EU Chips Act, a 43 billion euro ($46.07 billion) subsidy plan to double its chipmaking capacity by 2030 in an attempt to catch up with Asia and the United States.

Speaking at the company’s annual shareholders meeting, Taiwan Semiconductor Manufacturing Co’s Chairman Mark Liu said the company had already sent executives to Germany a few times for talks on the possible new plant.

“So far the feeling is good,” he said, adding there were some “gaps” in the supply chain and labour in Germany but these were being addressed.

“We are still negotiating with Germany on subsidies, how much the subsidies will be, that there won’t be conditions for the support. Germany is discussing this in detail,” Liu said.

The company does not expect to decide whether to proceed before August at the earliest, a TSMC executive said last month.

TSMC is also investing $40 billion in a new plant in the western U.S. state of Arizona, supporting Washington’s plans for more chipmaking at home, but has expressed concerns about the criteria for U.S. semiconductor subsidies.

South Korean chipmakers have also raised concerns over the conditions, which include sharing excess profits with the U.S. government. Industry sources have said the application process itself could expose confidential corporate strategy.

Liu said the U.S. Department of Commerce (DOC) had an “open” attitude towards the subsidy conditions, adding that TSMC had last month submitted a “pre-application” and it would continue to have “positive communication” with the United States.

The DOC has said it will protect confidential business information, adding that the requirement to share excess profits would only occur when projects significantly exceeded projected cash flow.

($1 = 0.9333 euros)