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Taiwan Semiconductor Manufacturing company is in early talks with the German government regarding plans to set up a plant in the country, reported Bloomberg on Saturday. The news came from a senior executive.

Several factors will influence the choice made. They include customer demand, government subsidies, and the availability of talent. Senior Vice President of Europe and Asia Sales, Lara Ho, spoke to reporters during a forum in Taipei about the things TSMC will look at when making its decision. These discussions come when the European Union is trying to increase domestic chip production to avoid running into another supply chain disruption in the future.

Nothing concrete yet

The Covid-19 pandemic was a learning moment for many governments and industries, which has led to many of the premier world powers investing in chip production to ensure their industries dependent on chips never have to face a crunch like the one experienced in the 2020/21 fiscal year.

The shortage is expected to continue into 2022 before things stabilize. Ho said that the Taiwanese company has not yet discussed incentives with Berlin or decided on where it could be located, should Germany be eligible for a plant.

TSMC is diversifying

TSMC Chairman Mark Liu spoke to shareholders in June and told them that the company had started assessing where it could set up manufacturing plants in Germany. The Taiwanese company is the world’s largest contract chipmaker and has most of its production sites located within Taiwan.

Over the past year, it started diversifying to help meet the demand from various countries and is now building a facility in Arizona worth $12 billion with another $7-billion plant planned for Japan.

Meanwhile, as part of its program to boost semiconductor production, the EU will unveil the European Chips Act in the first half of 2020.