TSMC announced last year that it would build a plant in Dresden, Germany. The plant is originally expected to break ground as early as Q4 this year, but now it may start sooner. According to a report from Deutsche Welle, TSMC’s Dresden plant will begin construction within a few weeks, which means it will start this fall, aligning with the company’s previously announced timeline.

The TSMC Germany plant was initially scheduled to begin construction in the second half of 2024 and to start production by late 2027. The new plant is expected to create approximately 2,000 direct high-tech jobs. TSMC will hold a 70% stake in the plant, with Bosch, Infineon, and NXP each holding 10% stakes, and TSMC will operate the facility. The EU and the German government are subsidizing about half of the plant’s investment.

To ensure the plant can commence production smoothly in 2027, the city of Dresden is investing EUR 250 million to build an industrial water supply system and enhance the reliability of the local power grid.

The TSMC Germany plant is expected to use 28/22nm planar CMOS and 16/12nm FinFET process technologies, with a monthly production capacity of approximately 40,000 300mm (12-inch) wafers.

On the other hand, another global semiconductor giant, Intel, was said to have delayed its construction of Fab 29.1 and 29.2 in Magdeburg, Germany, as the new timeline pushed the start of construction to May 2025, according to a report by Tom’s Hardware, citing German media outlet Volksstimme.

Read more

• [News] TSMC Maintains Overseas Expansion Strategy, Unfazed by Geopolitical Disruptions
• [News] Intel’s 1nm-class Fabs in Germany Reportedly Delayed Due to Black Soil Concerns and Pending EU Subsidy Approval

(Photo credit: TSMC)

Christian Koitzsch, former plant manager of Bosch’s semiconductor facility in Dresden, has transitioned to a new role as the president of TSMC’s European Semiconductor Manufacturing Company (ESMC).

Frank Bösenberg, the Managing Director of the Semiconductor Association “Silicon Saxony” in Dresden, confirmed on the professional networking platform LinkedIn that Christian Koitzsch, the former plant manager of Bosch Semiconductor Manufacturing Company in Dresden, has embarked on a new journey in the new year, assuming the role of president at the ESMC, a subsidiary of TSMC.

In Christian Koitzsch’s LinkedIn profile, he also has indicated that his current position is the President of the ESMC. He is expected to oversee the construction of TSMC’s new plant in Dresden, with groundbreaking anticipated in the latter half of this year.

Dr. Koitzsch holds a PhD in physics and has previously held various managerial positions at Bosch, a major automotive components manufacturer. In July 2021, he assumed the role of plant manager at Bosch’s semiconductor fab in Dresden before transitioning to his current role as the President of the ESMC.

Bosch’s 12-inch fab primarily produces chips for automotive applications and is renowned for its high level of automation, claiming to be the most advanced fab in Europe. The designated location for TSMC’s Dresden plant happens to be right next door.

In August of 2023, TSMC announced the establishment of a joint venture, the ESMC, in Dresden, Germany’s eastern region. TSMC holds a 70% stake, while European semiconductor companies such as Bosch, Infineon, and NXP each hold a 10% stake.

This is TSMC’s first manufacturing facility in Europe, scheduled to commence production by the end of 2027. The German government has approved a subsidy of EUR 5 billion, facilitating this investment project with a total amount exceeding EUR 10 billion (approximately USD 10.9 billion).

Read more

• [News] Germany Resolves Budget Standoff, Maintains Subsidies for TSMC and Intel
• [Insights] In-Depth Analysis of TSMC, PSMC, and UMC’s Latest Overseas Expansion Strategies

(Photo credit: TSMC)

Source to China Times, the International Semiconductor Industry Association (SEMI) forecasts that from 2023 to 2026, the global semiconductor industry will add 12 new 8-inch wafer fabs, with 8-inch fab monthly production capacity increasing by 14% to a historic high of 7.7 million wafers. In response, UMC stated that from a supply and demand perspective, capacity growth still lags behind demand growth. UMC emphasized that it remains optimistic about the future of the 8-inch wafer market, thanks to ongoing advancements in special processes and differentiation.

SEMI notes that the continuous rise in the penetration rate of electric vehicles (EVs) worldwide is driving substantial growth in the demand for inverters and charging stations. The future mass adoption of EVs is the primary driver for increased investments in 8-inch fabs and the continued expansion of global 8-inch fab capacity.

Examining the situation of new 8-inch fabs in various countries, Southeast Asia will see the largest capacity increase, with a growth rate of approximately 32%. SEMI predicts that China’s 8-inch fab capacity will follow, with an increase of about 22%, reaching a monthly production capacity of 1.7 million wafers. The United States, Europe, the Middle East, and Taiwan are expected to have growth rates of approximately 14%, 11%, and 7%, respectively.

SEMI reports that by 2023, China’s 8-inch fab capacity will account for approximately 22% of the global total, with Japan at around 16%, Taiwan at around 15%, and Europe, the Middle East, and the United States each at about 14%. Furthermore, to meet future market demand, suppliers such as Bosch, Infineon, Mitsubishi, Onsemi, and STMicroelectronics are accelerating their 8-inch fab capacity expansion. It is estimated that from 2023 to 2026, the 8-inch fab capacity for automotive and power semiconductors will increase by 34%.

Concerns have been raised about potential oversupply as global 8-inch fabs expand, but UMC, a major semiconductor foundry, states that given the current rate of 8-inch fab expansion worldwide, the increase in capacity is relatively modest compared to demand. From a supply and demand perspective, it is certain that capacity growth will not keep pace with the growing global demand for 8-inch wafers.

UMC further notes that while 8-inch fabs are increasing, demand is unlikely to remain stagnant. Currently, the majority of semiconductor fabs being built worldwide are 12-inch fabs, making the expansion of 8-inch fabs relatively limited, and the supply-demand balance has not worsened.

(Source: https://www.chinatimes.com/newspapers/20230922000218-260204?chdtv)

As reported by TechNews, a media partner of TrendForce, Southeast Asia and India, equipped with the advantages of demographic dividends, strategic geographic positioning, manufacturing capabilities, and rapidly growing economic markets, have undoubtedly emerged as the preferred destinations for the technology industry amidst the global supply chain transition prompted by geopolitical factors.

As supply chains actively seek production bases beyond China and governments introduce incentive programs and policy restrictions for localized supply, various Southeast Asian countries have become key hubs for different sectors. Vietnam has become a focal point for consumer electronics manufacturing such as laptops, watches, and headphones, while Thailand has become a preferred choice for automotive-related supply chains. Thailand and Malaysia host assembly bases for servers, and India is set to become a crucial hub for mobile phone production.

Apart from the movement of end-product assembling, the shift in the semiconductor supply chain has also garnered attention. With TSMC, Samsung, and Intel relocating wafer fabrication plants to the United States, Europe, and other regions, a significant cluster of semiconductor backend testing and packaging has been forming in Malaysia.

What Advantages Does Malaysia Offer to Attract Multinational Semiconductor Companies’ Investment, and What Is the Current Industry Landscape?

Firstly, Malaysia boasts higher education standards than neighboring countries. Among ASEAN nations, only Singapore and Malaysia employ the British legal system, providing a competitive edge for many companies’ location choices. Secondly, in terms of language proficiency, Malaysian citizens predominantly use English, Mandarin, and Malay, facilitating smooth communication with global enterprises.

Thirdly, Malaysia is home to two major ports—Port Klang and Port of Tanjung Pelepas—both ranked among the world’s top 15 ports, with substantial container handling capacity and global reach.

Lastly, the state of Penang stands as a semiconductor hub for Malaysia, having nurtured the semiconductor industry for several decades and holding a technological lead. Often referred to as the “Silicon Valley of the East,” Penang has primarily focused on producing chips for electronics, computers, and mobile phones. However, with the growing adoption of electric vehicles, the demand for automotive chips has surged. Concurrently, the green energy trend has propelled the need for solar panels and renewable energy sources. This optimistic outlook for the semiconductor industry has once again attracted numerous companies to establish facilities and expand production capacity.

Current State of Malaysia’s Semiconductor Industry

Looking at the recent dynamics of corporations over the past two years, the trend is evident that Malaysia is evolving into a center for semiconductor backend testing and packaging. Major global players have announced plans to establish or expand operations in Penang. Intel, for example, announced a $6.46 billion investment in Malaysia in 2021, focusing on advanced packaging capabilities in Penang and Kedah.

Texas Instruments declared its intent to construct semiconductor testing and packaging plants in Kuala Lumpur and Malacca, with a total investment of up to $2.7 billion. Infineon is investing $5.45 billion to expand existing facilities, producing silicon carbide and entering the electric vehicle sector. Bosch Group is investing $358 million in stages to strengthen its semiconductor supply chain position in Penang. ASE Technology Holding, also began construction on a new testing facility in Penang at the end of last year.

With the influx of semiconductor giants, Malaysia’s position in the semiconductor industry has become increasingly critical. The distinct production base trends, aligned with the strengths of various Southeast Asian countries, have become clear. The restructuring of supply chains and the transformation of production centers undoubtedly remain the focus and challenge for global companies.

(Photo credit: ASE)

Leading semiconductor companies TSMC, Robert Bosch GmbH, Infineon, and NXP Semiconductors have jointly to invest in the European Semiconductor Manufacturing Company (ESMC) GmbH, situated in Dresden, Germany. This strategic move aims to bolster the region’s semiconductor manufacturing capabilities, particularly catering to the burgeoning automotive and industrial sectors. The establishment of ESMC marks a significant stride towards the realization of a 300mm fabrication facility, pending the final decision on public funding, as part of the European Chips Act framework.

The planned fab is expected to have a monthly production capacity of 40,000 300mm (12-inch) wafers on TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology, further strengthening Europe’s semiconductor manufacturing ecosystem with advanced FinFET transistor technology and creating about 2,000 direct high-tech professional jobs. ESMC aims to begin construction of the fab in the second half of 2024 with production targeted to begin by the end of 2027.

The prospective joint venture will see TSMC holding a substantial 70% ownership stake, while Bosch, Infineon, and NXP will each possess a 10% equity share, contingent upon regulatory approvals and meeting specific conditions. Total investments exceeding 10 billion euros are anticipated. Operational oversight of the fabrication facility will reside under TSMC’s purview.

However, industry analysts at TrendForce have highlighted potential challenges that lie ahead for TSMC’s groundbreaking endeavor. One such challenge pertains to the looming labor shortage issue in TSMC’s US fabrication facility, which is projected to reverberate globally. Moreover, navigating the intricacies of implementing subsidy policies in accordance with the European chip legislation and anticipated administrative procedures is expected to introduce a layer of complexity to the venture.

(Photo credit: TSMC)