TSMC in advance talks for its European plant.

TSMC is in advanced talks with crucial suppliers about setting up its first potential European plant in the German city of Dresden, a move that would allow the world’s largest chipmaker to capitalise on booming demand from the region’s car industry. The trip will be the second in six months by TSMC executives, and a final decision on whether to invest billions of dollars in a plant, which could begin construction in 2024, is expected to follow soon after, the people said. Last year TSMC was asked by customers to consider building a plant in Europe but halted an initial review following Russia’s invasion of Ukraine. But the people said that growing demand from Europe’s carmakers for a supply of locally manufactured chips had prompted TSMC to revisit the idea.

TSMC’s talks with several materials and equipment suppliers are focused on whether they can also make the investments needed to support the plant. « We wouldn’t let walk alone in the desert,» said one executive from a supplier that would provide necessary materials to the Dresden plant, adding that state support would be required. Intel is still committed to investing in Europe, but the Magdeburg plant had to be competitive, according to people familiar with the matter. If TSMC presses ahead with a Dresden plant, it will focus on 22-nanometre and 28-nanometre chip technologies, similar to those it plans to make in a factory it is developing with Sony in Japan.

TSMC will have to weigh whether building a Dresden plant will put too much of a strain on its workforce. However, a TSMC spokesperson said that «no possibility» was being ruled out regarding a potential plant in Dresden.

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