€5bn subsidy approved as ESMC breaks ground for Dresden fab
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The European Commission has approved a €5 billion subsidy to support the European Semiconductor Manufacturing Company (ESMC) in Dresden just in time for the wafer fab ground-breaking ceremony being held there Tuesday August 20.
The Commission has approved German plans to provide the support for the construction and operation of a wafer fab with half of an estimated cost of €10 billion.
German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen were due to be in Dresden today and uncertainty or delay around the subsidy would have proved an embarrassment.
The fab will be operated by TSMC and owned 70 percent by TSMC with NXP, Infineon and Bosch each owning 10 percent. TSMC chairman and CEO CC Wei is expected to officiate the ceremony.
The fab is not intended to operate at the leading-edge but deliver chips for automotive and industrial applications made using 28/22nm and 16/12nm nodes using FinFET technology.
However, European politicians and companies working on AI and high-performance computing chips would also like to see ESMC quickly move to 6nm and 3nm to provide a domestic capability to produce more advanced chips.
ESMC will operate as an open foundry allowing others besides the three European shareholders to use the fab. The foundy will also offer access to small European companies and European universities.
With construction starting in 2H24 the plan of record is for production to begin by late 2027. The plant is planned to be operating at full capacity by 2029 with a manufacturing capacity of 40,000 wafer starts per month.
Case approved
The European Commission assessed that the subsidy is in-line with EU state aid rules on a number of grounds including that it has “limited impact on competition and trade within the EU. It is necessary and appropriate to ensure the resilience of Europe’s semiconductor supply chain.”
The Commission has also approved Italian measures to support STMicroelectronics in the construction and operation of silicon carbide wafer fabs in Italy and a €2.9 billion French aid measure to support STMicroelectronics and GlobalFoundries in the construction and operation of a wafer fab in France.
Related links and articles:
ESMC appoints manager as key positions change in Dresden
TSMC’s Dresden fab talks reach advanced stage, says report
€10 billion EMSC joint venture FINFET fab for Europe
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