TSMC's European Expansion: A Call to the Artificial Intelligence Market

Taiwan Semiconductor Manufacturing Co. (TSMC) plant to significantly expand its presence in Europe, with a particular focus on the market for artificial intelligence chips. This was confirmed by Wu Cheng-wen, Minister of the Taiwanese Council for Science and Technology, in an interview with Bloomberg TV. While the timeline for expansion plans in Europe remains unclear, TSMC emphasizes that expanding its global presence is currently a top priority. In August, TSMC began constructing its first factory in the European Union, a chip plant in Dresden with an investment volume of 10 billion euros. Interestingly, about half of the project costs are covered by government subsidies. Production is expected to start by the end of 2027. The Minister pointed to the market for AI chips, particularly for customers like Nvidia and AMD, as a crucial factor for the company's future plans. While established European chip companies like NXP Semiconductors and Infineon Technologies focus on industrial and automotive applications, new design companies are emerging in Europe, such as Germany's Black Semiconductor and Axelera AI from the Netherlands. This dynamic development offers TSMC additional opportunities. Furthermore, TSMC's new overseas locations also create opportunities for nearby countries to attract investments from TSMC's suppliers. The Czech Republic could benefit from this as the relations between Prague and Taipei intensify. Wu Cheng-wen hinted that the Taiwanese government is considering support for investments from TSMC suppliers near Dresden and is also aiming for joint research programs with Czech and Taiwanese academics. In conclusion, Wu noted that Taiwanese chip manufacturers, regardless of the outcome of the upcoming U.S. presidential elections, are expected to be under pressure to advance their expansion in the United States. However, the prospect of long-term improvement makes these costly relocations worthwhile.