Several key partners have just announced plans to build European Semiconductor Manufacturing Company (ESMC) GmbH, a joint venture between TSMC, Robert Bosch, Infineon Technologies and NXP Semiconductors. TSMC will hold a 70% stake, the other three will each have 10%.
ESMC will begin construction on a fab in the second half of next year and plans to begin mass production of chips in 2027. Before I get too excited, please note that this fab will focus on older nodes.
The goal is to produce 40,000 300mm (12”) wafers per month using TSMC’s 28/22nm planar CMOS process and 16/12nm FinFET process. Both are a decade old at this point, but Fabulous won’t be building smartphone chipsets or GPUs.
Bosch, Infineon and NXP are the major players in the automotive hardware market (the first two are German, the second is based in the Netherlands). These older nodes are well suited for the dozens and dozens of microcontrollers that go into a modern car. Also, Infineon creates memory for embedded systems, this is also a use case. A few years ago TSMC built a dedicated 28nm fab for Sony image sensors as well (and modern cars have several cameras on board).
There are other products that can be made in these nodes, for example, Samsung announced the start of production of 12nm DDR5 RAM earlier this year, even if it is cutting edge now, it will be quite old by 2027 .
Again, this is clearly a move intended to strengthen the EU’s automotive and industrial sectors rather than trying to enter new markets that need cutting-edge silicon. But if you’ve paid any attention to the automotive market in recent years, you’ll remember the havoc the chip shortage has wreaked on the industry. With a secure domestic supply, local producers will be in a better position when another shortage inevitably occurs.
The total investment in the project is over 10 billion euros. It will create about 2,000 jobs for high-tech professionals, the factory will be operated by TSMC.
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