TSMC's New Fab in Germany

The rumors have long been cooking. Reuters said that it took 40 rounds of talks. But now the news is finally here: TSMC is building a fab in Europe.

I was asked by a fan in Germany to give a few thoughts on the news. I love my German viewers so let's do it!

But first …

The AI and Semiconductor Symposium in Taipei

Are you going to SEMICON 2023 in September? If you are coming to Taipei, then you should come to the AI and Semiconductor Symposium that me, Dylan Patel of SemiAnalysis and Doug O’Laughlin of Fabricated Knowledge are hosting.

The three of us will give talks about AI, the semiconductor industry, and semiconductor history. And Dylan tells me that there’s going to be a secret special guest. I have no idea who it is, right now. He is keeping it secret.

Deal

There are a few things about the structure of TSMC Dresden - ESMC as they will call it - which are interesting to me.

ESMC is a joint venture between TSMC and three European electronics companies - Robert Bosch, Infineon, and NXP. TSMC will own 70% and the three European companies will each own a 10% slice.

TSMC will operate the fab, which will produce two nodes - a 28/22 nanometer planar node and a 16/12 nanometer FinFET node.

The "planar" and "FinFET" parts of the node's name is a reference to the type of transistor gates that the nodes will produce. FinFET nodes stick up over the silicon landscape, which is why they are referred to as being 3-D.

Intel first introduced FinFETs in 2011. TSMC and Samsung first started using FinFETs. So this fab trails the leading edge by about 10 years or so. By the time construction is estimated to be complete in 2027, it will be even older than that - 14 years old.

The German government will provide about $5 billion of the estimated $11 billion needed to build the plant. TSMC's press release did not mention how much that they are putting in, but Reuters said it was about $3.8 billion USD.

So all in all, TSMC only needs to spend $3.8 billion to obtain majority control of a $11 billion fab. Of course, I say "only" as in $3.8 billion is nothing, which it isn't. And they still have to run it.

The European Commission needs