Amid intense global competition for semiconductor chips, Taiwanese suppliers are exploring the possibility of investing in Europe, the Financial Times reported.
Vincent Liu, President and CEO of LCY Group, which provides cleaning agents and solvents to Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chip manufacturer, announced their intentions. “We are planning to invest in Germany and the European market will be ours” said. LCY Group is not alone in this effort; Three other chemical suppliers to TSMC have also expressed interest in investing in Europe.
This interest is closely linked to the establishment of advanced chip factories in the European Union, facilitated by the EU’s Chip Law. The EU’s Chip Act aims to attract €43 billion in public and private investment to increase the union’s share of global production capacity from 10% to 20% by 2030.
As part of this initiative, the EU is offering subsidies to encourage foreign chipmakers to set up factories within its borders. Intel, for example, has committed €30 billion to build two chip factories in Germany and is planning a €4.6 billion semiconductor assembly and testing facility in Poland.
Taiwan Semiconductor Manufacturing Co (TSMC) has partnered with European chipmakers Infineon and NXP, as well as auto supplier Bosch, to build a €10 billion chip plant in Germany. Additionally, multinational chipmaker GlobalFoundries and European chip company STMicroelectronics have plans to build a €5.7 billion factory in France.
Highlighting the importance of the Chip Act, which came into force in September, Commission Vice-President for Values and Transparency Věra Jourová said: “The global race for leadership in chips is a reality and Europe must ensure its active role in this race.”
Establishing domestic semiconductor manufacturing and strengthening the supply chain is vital for the EU to reduce its dependence on a limited number of foreign suppliers, which include China and Taiwan in production and the United States in design. Although achieving full independence in semiconductors is considered “impossible” by experts, such investments are expected to significantly increase the EU’s competitiveness in the semiconductor sector.