Brussels has given the nod of approval to German state aid for the building of a new chip factory as Europe seeks better tech supply security. It came as ground was broken on the site in the eastern city of Dresden.
The European Commission on Tuesday said it had approved a new silicon chip factory in Dresden as Taiwanese semiconductor giant TSMC broke ground on its first European factory.
European leaders are keen to avoid dependence on other regions of the world for the supply of semiconductors — indispensable in an array of electronics from computers, to cars and and even missiles.
The approval allows the German federal government to provide €5 billion ($5.5 billion) of financial support for the new European Semiconductor Manufacturing Company (ESMC).
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The Commission said the ESMC was a joint venture between the Taiwanese company and three European firms — Germany’s Bosch and Infineon and the Netherlands’ NXP.
It’s also much closer to the Netherlands to bring the machines over compared to Taiwan.
When the machine costs 350 million euros, what’s a few hundred thousand in saved shipping costs?
I think the point is physically shortening the supply chain, less time and resources spent on logistics.