| Automotive News Europe | Chipmaker TSMC mulls German, Japan plants to diversify supply chain

Taiwan Semiconductor Manufacturing is in the early stages of considering a new chipmaking plant in Germany, Chairman Mark Liu told shareholders on Monday.

The world’s biggest chipmaker is also continuing its due diligence around building a semiconductor facility in Japan and that decision will depend on customer demand, Liu said. The company is engaged in weekly talks to assess the viability of such a project.

In both cases for potential international expansion, TSMC will look to share the cost, whether with customers or government authorities eager to bring its business within their borders. For the U.S., where TSMC is in the process of setting up a plant in Arizona, the company said its production will be primarily aimed at infrastructure and national security applications.

The global supply chain should be based on free-trade principles, except for national security needs, Liu said, echoing company founder Morris Chang’s comments earlier this month.

Germany is home to several major TSMC customers, including chip designer Infineon Technologies and automakers including Volkswagen Group and Daimler, whose electronics suppliers rely on the Taiwanese company.

Competition to serve those needs is heating up, as TSMC rival GlobalFoundries is looking to expand its production in Dresden while Intel has signaled interest in setting up its own plant in the country.

Germany may emerge as a chipmaking hub for continental Europe, should all these plans come to fruition.

“On Germany, we are making a serious assessment, but it is at a very early stage,” Liu said.

Chipmakers are cranking up production to address shortages that have hammered automakers and other customers as they try to emerge from the coronavirus pandemic. TSMC plans to spend $100 billion over three years ramping up its capabilities, joining Samsung Electronics, Intel and other industry players in expanding production capacity around the globe.

TSMC, the world’s most advanced manufacturer of semiconductors, has played an increasingly prominent role in global politics over the past year, negotiating with governments and major corporations desperate for the chips needed to power businesses and economies.

Taiwan’s grip on the semiconductor business — despite being under constant threat of invasion by Beijing — represents a chokepoint in the global supply chain that is giving new urgency to plans from Tokyo to Washington and Beijing to increase self-reliance.