Agencies
Taiwanese semiconductor giant TSMC broke ground Tuesday on its first European factory in the eastern German city of Dresden as the EU looks to shift key supply chains onto the continent.
German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen attended the ceremony to mark the beginning of construction work along with TSMC’s top brass, with von der Leyen hailing it as "an endorsement for Europe as a global innovation powerhouse”. Semiconductors have become indispensable in an array of industries, from electronics to wind turbines and even missiles.
TSMC is investing some 3.5 billion euros ($3.9 billion) in the Dresden project and will own 70 percent of the capital, with Dutch chipmaker NXP, Germany’s Infineon and Bosch owning 10 percent each.
Taiwan is home to a powerhouse semiconductor industrylargely thanks to TSMC’s dominance. But the supply chain is highly vulnerable to shocks and what von der Leyen referred to as "growing geopolitical tensions”.
A major concern that has emerged in recent years is over Taiwan’s neighbor, China, which claims the self-ruled island as part of its territory and has ramped up rhetoric about "unification”.
As a result, TSMC has come under pressure to widen its operations by opening factories in other parts of the world.
Meanwhile, western countries have been redoubling efforts to bring semiconductor production closer to home. Scholz said on Tuesday that "we are dependent on semiconductors for the sustainable technologies of the future” and added that "we must not be dependent on other regions of the world for the supply” of the chips.