The European Semiconductor Manufacturing Company (ESMC) has begun work on a €10 billion (about $11.1 billion U.S.) plant in Dresden following European Union approval for state assistance. A symbolic ground-breaking ceremony in the eastern German city coincided with the European Commission's approval of €5 billion in state subsidies.
ESMC is a joint venture between TSMC, Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V.
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The European Commission approved the funds to support ESMC's construction and operation of the manufacturing plant, which will make microchips. The groundbreaking ceremony officially marks the initial phase of land preparation for ESMC's first semiconductor fab in Germany. According to TSMC, the plant will be the EU’s first-ever FinFET-capable pure-play foundry.
The commission called the project a "first-of-its-kind in Europe." According to German Chancellor Olaf Scholz, every third microchip made in Europe comes from the region known as "Silicon Saxony," where Dresden is located. ESMC's wafer fab will also be located next door to Bosch's wafer fab in the area.
German Minister for Economic Affairs and Climate Action Robert Habeck said the investment will allow Germany to continue to grow as a hub for chip manufacturing and strengthen Europe's resilience in the semiconductor sector.
The plant will make chips for the automotive and industrial sectors. The company selected the Dresden site in August 2023, and production is expected to begin in 2027. By the end of 2029, ESMC expects to have a monthly production capacity of 40,000 300 mm (12-inch) wafers produced on TSMC’s 28/22 nanometer planar CMOS and 16/12 nanometer FinFET process technology.
The new facility is expected to create 2,000 direct jobs as well as numerous indirect jobs throughout the EU supply chain. ESMC is expected to uphold TSMC’s standards of sustainability and environmental protection, including energy-efficient construction, water reclamation, and obtaining LEED certification.
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