TSMC could partner with Bosch for 28nm fab in Germany
A TSMC fab in Germany targeting a 28nm process is a less advanced development than previously expected – but also a more affordable one (see TSMC’s Dresden fab talks reach advanced stage, says report). While targeting 28nm could go some way to addressing security of automotive chip supply – an issue that got Germany’s attention during the pandemic crisis – it would do nothing for European strategic security and the region’s ability to manufacture at the leading-edge.
One report said that discussions are still ongoing and focus on how Bosch and other partners can assume the risks around manpower, labor unions and production efficiency.
A spokesperson for Bosch said the company would not comment on the reports.
If the deal can be made TSMC would be following a similar finance model to one it has already pursued with Sony in Japan (Japan to provide 40 percent subsidy to TSMC, Sony venture) and would likely expect a similar level of subsidy.
Japan faces a similar problem to Europe: the need to meet volume supply chain needs behind the leading-edge of chip technology, and the strategic issue of remaining capable of chip manufacturing into the future, with sub-10nm production. Japan’s solution has been to have two initiatives. The TSMC, Sony, Denso joint venture addresses some medium-term volume needs , while Rapidus has been formed to aim at 2nm production later this decade (see Rapidus secures US$2.3 billion to start 2nm wafer fab). However, while Japan has moved relatively quickly, discussions have dragged on for a couple of years in Europe.
TSMC may be negotiating separately about bringing more advanced process technology to Germany; earlier reports referenced the introduction of 12nm manufacturing process (see TSMC mulls building a 12nm Dresden fab).
Germany has a deal agreed in principle with Intel to build two wafer fabs in Magdeburg but discussions continue over a so-called “funding gap” (see Report: Intel requires €10 billion subsidy for German fab). These fabs could host more advanced manufacturing process but, like TSMC, Intel may be more inclined to bring in manufacturing processes that are in demand commercially. Europe may desire a domestic source of leading-edge semiconductors at sub-10nm, for military AI capability, it has almost no volume requirement for chips made on such a process, as smartphone and computer manufacturing, left the continent decades ago. So
The European Union is in the process of creating the European Chips Act to provide €43 billion (about US$47 billion) in a bid to boost European chip making and cut reliance on US and Asian chipmakers, following the global supply chain problems. That could be ratified in law as soon as April 18 although how the money will be found is not clear.
Even if the money is found it is unlikely to achieve the stated aim of increasing Europe’s share of global chip production to 20 percent. This because almost all other chipmaking countries have also implemented major government semiconductor subsidy initiatives.