In response to supply chain vulnerabilities exposed by a global semiconductor shortage, the EU is planning to offer subsidies to chipmakers, including Intel Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to build new plants in Europe.
In an interview on Monday with the Frankfurter Allgemeine Zeitung, EU Commissioner for Internal Market Thierry Breton said that the chip shortage, particularly in its effect on the auto industry, had shown “how urgently we need to make our supply chains resilient.”
Specifically, Europe is interested in building manufacturing capacity for 5, 3 and 2-nanometer chips, which are only produced in Asia and the US, he said.
Photo: Reuters
To achieve this, the EU is considering a state-backed initiative similar to its European Battery Alliance, but also recognizes that it cannot succeed without the participation of major international companies, the article said.
“Europe is not naive, but we also don’t want to isolate ourselves,” Breton said.
As such, the EU would build bridges to international partners, “but with us in the driver’s seat,” he said.
Citing a source within the European Commission, the newspaper reported that Breton is to hold meetings on Friday with Intel Corp chief executive officer Patrick Gelsinger and a senior TSMC executive, while talks with Samsung Group are also planned.
Specifically, the talks with Intel are expected to focus on a new factory it is considering building in Europe, which would be “considerably larger” than the GlobalFoundries Inc plant in Dresden, Germany, that is the largest on the continent, the newspaper quoted a source as saying.
Such mega factories, which cost US$10 billion to US$20 billion, are already being built in Asia and the US, the source said, citing TSMC’s planned Arizona plant as an example.
“Europe is working to keep up with this and is holding out the prospect of aid in the double-digit billion euros range,” the person said.
TSMC yesterday declined comment on the reported meeting with Breton and the news that it was being courted by the EU.
However, industry watchers downplayed chances that the talks would bear fruit.
Ray Yang (楊瑞臨), a supervisor at the Industrial Technology Research Institute’s (工業技術研究院) Industrial Economics and Knowledge Center, said that Europe accounts for only 6 percent of TSMC’s customers, making it an undesirable choice for a manufacturing base.
Arisa Liu (劉佩真), a researcher at the Taiwan Institute of Economic Research (台灣經濟研究院), said that factors such as cost and the scale of the European market made a factory unlikely.
However, a research and development center for automotive chips might be a greater possibility, Liu said.
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