China Taiwan chip manufacturer TSMC issued a statement on August 8, investing 3.5 billion euros (3.8 billion U.S. dollars) to build a factory in Germany. The company's first factory in Europe.

TSMC said it would invest up to 3.499 billion euros in its subsidiary European Semiconductor Manufacturing Company (ESMC) and hold a 70% stake in the company.

Germany's Bosch (ROBG.UL) and Infineon (IFXGn.DE) and Netherlands' NXP (NXPI.O) will each own a 10 percent stake in the plant, subject to regulatory approvals and other conditions. The factory will then produce up to 40,000 wafers per month for automotive, industrial and household products.

The German semiconductor factory will be operated by TSMC, and the total investment is expected to exceed 10 billion euros. The planned fab is expected to have a monthly production capacity of 40,000 300mm (12-inch) wafers, using TSMC's 28/22nm planar CMOS and 16/12nm FinFET process technology to further strengthen the European semiconductor manufacturing ecosystem with advanced FinFET transistor technology and create about 2,000 direct high-tech professional jobs. ESMC aims to start construction of the factory in the second half of 2024 and start production by the end of 2027.

The German government is currently actively promoting domestic semiconductor manufacturing to catch up with Asia and the United States. Chip shortages and high prices have plagued German automakers and other manufacturers during the pandemic, prompting the country's efforts to expand indigenous semiconductor production.

TSMC's overseas expansion has raised concerns in Taiwan, China, about the trend of chip companies "leaving Taiwan", and semiconductor manufacturing is the backbone of Taiwan's economy. TSMC said its state-of-the-art manufacturing and research will continue to be rooted in Taiwan, but that more chips are produced overseas as part of its efforts to increase supply chain resilience.