European Commission Supports New Chip Factory in Dresden

European Commission President Ursula von der Leyen reaffirmed the EU's commitment to enhancing domestic semiconductor production during the groundbreaking ceremony for Taiwanese chipmaker TSMC's new facility in Dresden on August 20. This event follows the Commission's approval of a €5 billion state aid scheme for the plant, which will operate in collaboration with Bosch, Infineon, and NXP under the European Semiconductor Manufacturing Company (ESMC). The Dresden plant is the second-largest project under the EU's Chip Act, aimed at bolstering local chip production. The new facility will focus on producing flexible field-effect transistor-based chips, crucial for various industrial applications, particularly in the German automotive sector. Von der Leyen emphasized that the project would enhance European chip companies' access to advanced technologies and production capabilities, ultimately benefiting local industries through more reliable supply chains. The Dresden plant is part of a broader initiative, with previous funding allocated to projects in Italy and France. German Chancellor Olaf Scholz expressed strong support for the EU's ambition to secure 20% of global chip production by 2030, highlighting the importance of such projects in realizing the Chips Act's objectives. He acknowledged the necessity of financial incentives to establish semiconductor production in Europe, despite potentially higher costs compared to other regions. The EU Chips Act, enacted in response to supply chain disruptions during the COVID-19 pandemic, aims to enhance supply-chain security and foster semiconductor innovation across member states. The Commission noted that the Dresden facility will be the first of its kind in Europe, utilizing advanced technologies that cater to diverse market needs.