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Taiwan Semiconductor Manufacturing Company is in talks with its partners to put $11 billion (€10 billion) into building a chip fabrication plant in Saxony, Germany.

According to people familiar with the matter, the planned investment between TSMC, NXP Semiconductors NV, Robert Bosch GmbH and Infineon Technologies AG will come with state subsidies and have a budget of €7 billion. However, the total investment could end up being closer to €10 billion. For the time being, anonymous sources said that a final decision has not been made. The plans could therefore still change.

Assessments started in 2021

TSMC is still looking at the possibility of building a European plant, according to spokeswoman Nina Kao, who did not elaborate. Spokespeople for the other companies mentioned and Germany’s economy declined to comment on the plan.

In 2021, TSMC’s chairman Mark Liu told shareholders that the company had started its assessment on the possibility of opening manufacturing operations in Germany.

According to CEO C. C. Wei, the proposed plant would focus on automotive chips. In Germany, similar projects have asked for as much as 40% of their funding to come from subsidies as the European Union tries to double its share of global semiconductor production by 2030.

In April, the EU passed a €43 billion Chips Act intended to boost domestic output

The move came after the pandemic significantly disrupted supply chains amid tensions between the US and China. Getting state aid requires approval from the European Commission. The consortium is speaking to officials about the size of their package.

Over in Japan, TSMC is building an $8.6 billion plant with partners, with half the cost covered by the government.

The facility intended for Saxony could be approved by TSMC as early as August. It is expected to be geared towards making 28-nanometer chips. If the plan succeeds, it will be the company’s first fab in the EU.