[News] EU & Japan Grant Major Semiconductor Subsidies: Infineon, TSMC in Focus

Recently, the semiconductor industry has seen two major developments, as the EU and Japan have each announced substantial subsidies for semiconductor-related companies to promote local industry growth.

Infineon Receives €920 Million EU Subsidy, Dresden Plant Accelerates Development

On February 20, the European Commission approved a €920 million subsidy under the European Chips Act for Infineon’s new wafer fab in Dresden, Germany.

According to public information, Infineon’s Dresden project has a total investment of €5 billion and commenced construction in March 2023. It aims to begin operations in 2026 and reach full production capacity by 2031. Once completed, the plant will manufacture discrete power devices and analog/mixed-signal ICs, supplying industries such as automotive, consumer electronics, and industrial applications.

Infineon CEO Jochen Hanebeck stated that the government funding will strengthen Dresden, Germany, and Europe as a semiconductor hub, fostering advanced microelectronics innovation and production while boosting European semiconductor capacity and ensuring supply chain stability.

Japan Allocates ¥5.1 Billion Semiconductor Subsidy to Kumamoto, TSMC’s Plant Expected to Benefit

On February 19, according to foreign media reports, Japan decided to provide a ¥5.1 billion subsidy to Kumamoto Prefecture, home to TSMC’s semiconductor facility, to support the development of key supply chain production bases.

According to TrendForce, major semiconductor projects under development in Kumamoto include: TSMC Kumamoto Fab, Sony Image Sensor Factory, Powertech Technology (PTI) Semiconductor Testing Facility, Mitsubishi Electric SiC Wafer Fab, ASE Technology Backend Packaging Plant, Sumco Silicon Wafer Plant

TSMC’s first Kumamoto fab, located in Kikuyo, officially began mass production in December 2024. This facility focuses on 12nm to 28nm process logic semiconductors, with a monthly capacity of 55,000 12-inch wafers.

The combined investment for TSMC’s Kumamoto Fab 1 and Fab 2 exceeds $20 billion (approximately ¥3.14 trillion), with the Japanese government planning to provide ¥1.2 trillion (about $7.8 billion) in subsidies.

TSMC is also planning to build a second fab in Kumamoto, expected to break ground in early 2025 and commence operations in 2027. Additionally, the Kumamoto government is considering land support for the construction of a third TSMC fab.

The Sony Image Sensor Factory in Koshi, Kumamoto, began construction in April 2024 and will specialize in producing high-end image sensors for the automotive and consumer electronics sectors.

Powertech Technology’s Japanese subsidiary, Tera Probe, announced a ¥5 billion investment in Kumamoto at the end of January 2025 to expand semiconductor testing and measurement equipment. This move leverages TSMC Kumamoto’s “magnetic effect” to enhance local semiconductor testing capabilities and meet rising market demand.

Mitsubishi Electric is constructing a SiC fab in Kikuchi, Kumamoto, scheduled for mass production in November 2025. The company is also expanding an 8-inch SiC wafer production line in Koshi.

ASE Technology Holding signed an agreement with Kitakyushu, Fukuoka in July 2024 to acquire municipal land for a backend packaging plant.

Major silicon wafer manufacturer Sumco is planning to invest over ¥400 billion in Yoshinogari, Saga Prefecture, to expand its production capacity in Kyushu.

Industry insiders suggest that, given Kumamoto’s semiconductor projects and Japan’s recent subsidy trends, the majority of the allocated funds will likely be directed toward supporting TSMC Kumamoto Fab’s construction and expansion, further enhancing Japan’s semiconductor supply chain.

On February 20, Japanese media also reported that Kumamoto Prefecture is planning to build a new wastewater treatment plant for TSMC’s factories.

(Photo credit: TSMC)