Taiwan Welcomes European Union Funds To Build Chipset Factory

JAKARTA - The European Union (EU) this week gave the green light to pour funds into the semiconductor industry by 2030, to revive local chip manufacturing. And, this news was welcomed by the Taiwanese government.

The plan, European governments will disburse funds of more than 40 billion euros, which is equivalent to Rp. 655 trillion more. Under the rules of the European Chips Act, the Taiwanese government was among the first to commend the move.

This is because the EU is considering helping chipset giant Taiwan Semiconductor Manufacturing Co (TSMC), based in Taiwan, to build a factory in Europe.

"In the post-pandemic era, Taiwan and the EU have enormous scope for cooperation in restructuring global supply chains such as semiconductors, industrial recovery, and strengthening democratic resilience," said a statement from Taiwan's Ministry of Foreign Affairs published by Reuters.

Collaboration with semiconductor market leaders like Intel and TSMC is a good way to increase local chip production. Intel plans to build its next production plant in mainland Europe, while TSMC last year began considering Germany as the location for its first factory in Europe.

Reported earlier, the European Chips Act has proposed an investment of 11 billion euros by 2030, the funds coming from the EU budget and member states to meet the required pilot pathways and design platforms.

The funds will be used to bring advanced semiconductor process technology from the lab to manufacturers such as mega fabs, which are semiconductor production facilities with a production capacity of more than 25,000 wafers starting per month.

Launching Tom's Hardware, Thursday, February 10, to enable such incentives by member state governments, the EU needs to relax its regulations.

There are several companies that are already making chips in Europe. One of them GlobalFoundries operates Fab 1 near Dresden, Germany, where it manufactures chips for cars using special technology as well as low-power chips using its FD-SOI nodes.

Intel has a factory near Leixlip, Ireland, where the company intends to manufacture cutting-edge processors using the Intel 7 and Intel 4 fabrication processes.

However, Intel and GlobalFoundries have the most advanced fabs and the EU believes that this is not enough to meet the growing demand for chips, which is why additional semiconductor production facilities are needed.

While Spain's daily coronavirus cases are still at more than 40,000, the country has lifted restrictions, following high vaccination rates, including lifting the mandate for people to wear masks outdoors starting Thursday, February 10.

As Intel requires leading-edge fabrication technology for its own processors, the company is likely to build a leading Intel 25A and Intel 18A capable manufacturer in mainland Europe, which would be a breakthrough for a block that lags behind Taiwan and the US in chip production for more than a decade.

The situation seems very different with TSMC. The company says that there aren't enough clients for the leading fabrication technology in Europe, which is why it doesn't make sense to build a suitable fab there.

However, no official decision has been made by which companies to support and their funding efforts, so currently the European Chips Act is just a declaration of intent rather than a series of projects to be financed by the EU, and member states.