Germany approves $11 billion TSMC chip factory
Taiwan Semiconductor Manufacturing Company has been working to expand its manufacturing footprint for quite some time, and now it has a major factory deal in Germany set in motion.
TSMC plant
TSMC is one of the largest semiconductor manufacturers on the planet, and works with a variety of different companies for their chip needs. Of course, one of the largest partners is Apple, but TSMC has ambitions beyond the Cupertino-based company's yearly requirements.
A new chip factory in Germany will cost upwards of $11 billion, with TSMC itself committing 3.5 billion euros, or $3.8 billion towards the effort, according to Reuters. Once the factory is up and running, it will be TSMC's first in Europe, and just the third for the company outside of Taiwan and China.
Germany sees a path to foster a more domestic approach to semiconductor manufacturing, especially for its automotive future in a bid to stay competitive in that market. This new plant is part of a wider movement by the European Union, which recently approved the European Chips Act that offers a 43 billion euro subsidy plan to propel domestic chip making.
Germany itself will be contributing 5 billion euros to the factory that will ultimately be built in Dresden.
TSMC continues to make deals that sees the chipmaker expand beyond its home territory, a move that Apple is trying to do in its own right. The company has been trying to move beyond its China dependency for years now, with some efforts in the United States.
In that process Apple has turned to India. It has been a slow process so far, and will remain that way for quite some time, but expectations are high that Apple may see India exporting one in every five iPhones by 2025.
Apple's manufacturing partnership with TSMC has been longstanding one, so much so that it was recently reported Apple has a "sweetheart deal" that saves the company millions of dollars because it only charges Apple for "known good dies." However, a subsequent report based on details provided by Ming-Chi Kuo says that's not true at all.
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Some fun facts:
- China accounts for roughly 70% of min production of rare earths, basically needed in almost any product in electronics, aerospace, automotive, etc.
- Meds are largely coming from China and India
- numerous products such as certain clothing, toys etc. aren’t made at all anymore in the US, or Europe
And if you want to see infrastructure deflation, just come to America, Western Europe aside from Great Britain has done a much better job in maintaining and building their infrastructure, the rail system in America is stuck in the 19th century (train derailments at 40 mph), in comparison to western Europe and east Asia.
The 80s onwards saw the UK transform from a manufacturing industry to a services industry.
More and more of its manufacturing capacity was for other countries who had massive reservations about setting up factories in the UK because of the 'power of the unions'.
With Brexit we now how easy it is for multi nationals to up and go elsewhere.
Nowadays, the term 'manufacturing' is insufficient for comparisons as it is really about 'advanced' manufacturing now (the marriage of technology, communications, 'intelligence' and the manufacturing itself.
With regards to that, the EU actually sits quite favorably in terms of strategic dependencies.
I did a quick search for Germany and this is the first result that came back from Google
https://www.trade.gov/country-commercial-guides/germany-advanced-manufacturing
But it's all a question of balance and markets.
German brands Siemens, Bosch, Balay have a huge factory in Zaragoza, Spain for washing machines and other appliances because Spain is cheaper to operate from for some companies.
But if you want to turn things up a notch it's impossible not to look to China and not only because of labor costs. It has everything you need and a gigantic market.
Here is an example of washing machines:
Of course, in the specific field of advanced semiconductors, more can be done and that is why the EU has been bolstering its efforts. Not to displace any particular nation but to reduce dependencies on outside nations.
That was the stated goal of the EU processor initiative which has been laying the acedemic and manufacturing groundwork for a few years now. Basically coordinated from the Barcelona Supercomputing Centre.
Bosch had already announced a huge plan to build a semiconductor plant and more will come.
Also, let's not forget that everything that comes out of TSMC is largely dependant on hardware from an EU company: ASML.
It was a fairly significant sector, and it was deliberately destroyed by the CDU-led government.
According to the German Solar Industry Association, the revenue of the German solar industry in 2014 was €13.1 billion. This represented a decline of 8% from 2013, but was still higher than the revenue in 2010.
The decline in revenue in 2014 was due to a number of factors, including:
Despite the decline in revenue, the German solar industry continued to grow in terms of installed capacity. In 2014, Germany added 5.6 gigawatts of solar power capacity, bringing the total installed capacity to 35.7 gigawatts.
The German solar industry is expected to continue to grow in the coming years, driven by government policies to promote renewable energy and the increasing cost of fossil fuels. The German government has set a target of generating 80% of its electricity from renewable sources by 2030. This will require a significant expansion of the solar industry in Germany.
If this target is met, the German solar industry could reach a revenue of €20 billion by 2030.
Is Google Bard a trustable source?
If you don't consider that, then China is still trailing the U.S.
The U.S. is about 1/4 the population of China.
For that, China's economy is seeing a lot of chaos, substantial unemployment for it youth, and an aging, decreasing population which doesn't bode well for the future.