ESMC: 5 billion euros approved, ground-breaking ceremony held

Chip manufacturer TSMC, Bosch, Infineon and NXP begin construction of the ESMC plant in Dresden. The federal government is contributing 5 billion euros.

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Two wafers with colorful chip structures on top of each other

So far, TSMC has only produced such wafers in Asia. New fabs are currently being built in Europe and the USA.

(Image: Taiwan Semiconductor Manufacturing Co., Ltd.)

3 min. read

TSMC, Bosch, Infineon and NXP start building their semiconductor plant in Dresden. Together, they have founded the joint venture European Semiconductor Manufacturing Company (ESMC) as a GmbH, which is expected to start chip production in Germany at the end of 2027.

The groundbreaking ceremony – was symbolically held today, Tuesday, by representatives of the four companies involved and German and European representatives. Among those present were TSMC's CEO C. C. Wei, German Chancellor Olaf Scholz and Ursula von der Leyen as President of the European Commission. ESMC CEO Christian Koitzsch was present without a shovel.

To coincide with the ground-breaking ceremony, the EU Commission approved federal funding for the ESMC semiconductor plant. The Federal Ministry for Economic Affairs and Climate Protection is contributing 5 billion euros or 50 percent of the total costs. TSMC is investing 3.5 billion euros and holds 70 percent of the ESMC shares. Bosch, Infineon and NXP will each receive a 10 percent share for 500 million euros.

At 50 percent, the funding is comparatively high. Intel, for example, is receiving 10 billion or just under a third of the total investment for its Magdeburg semiconductor plants. ESMC primarily produces for Germany's prestige industry: car manufacturers.

The initial products include microcontrollers for engine control units, infotainment and driver assistance systems as well as radar sensors with structure widths of 28/22 nanometers and 16/12 nm. The EU Commission confirms that ESMC is bringing new production technology to Europe, despite the nominally old production generation. In particular, the integration of non-volatile memory in the form of MRAM and RRAM directly into controllers is regarded as innovative.

The Commission also cites other arguments in favor of the funding:

  • Without the funding incentive, TSMC would not come to Europe at all
  • ESMC shares unexpectedly high profits with Germany
  • ESMC primarily fulfills orders within the meaning of the EU Chip Act to manufacture crisis-relevant products in Europe in the event of a crisis
  • ESMC wants to invest in continuous innovation in the EU
  • ESMC supports start-ups and universities, for example with production runs

From 2029, the Dresden plant will be operating at full capacity and from then on will expose 40,000 wafers with a diameter of 300 mm per month. 2,000 jobs will be created directly at ESMC and thousands more at suppliers.

Speaking on behalf of the Silicon Saxony Association, its Managing Director Frank Bösenberg says: "The establishment of TSMC enriches Silicon Saxony enormously. The rapid realization of the ESMC investment project is also supported by the close cooperation with experienced approval authorities in the Free State of Saxony and the state capital, Dresden. This expertise, which has been built up over the years through similar projects, enables the entire settlement process to be handled efficiently. We can already see how both the region and the suppliers are benefiting from the developments and continuing to grow."

(mma)

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This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.