Taiwan Dashes EU Hopes Of Advanced Chip Production In Europe

EU setback. Taiwanese government minister rejects EU plan, and points to TSMC decision to focus chip expansion in Taiwan, not Europe

Attempts by the European Union to try to encourage more mainstream chip production in the region are not looking promising.

The EU setback comes after Taiwan’s Economy Minister, Wang Mei-hua on Wednesday, was quoted by Reuters as playing down the prospect of Taiwanese tech firms making advanced semiconductors in the European Union.

The minister noted that industry leader TSMC, which is the world’s largest third-party chip manufacturer, has insisted it will focus its most advanced technology on Taiwan, and not Europe.

Image credit: European Commission
Image credit: European Commission

EU hopes

Europe of course has large chipmakers including Infineon, STM and NXP, but they do not manufacture cutting-edge processors, but instead focus on niche markets such as the chips used in cars.

The European Union however has been trying to change that.

In March the EU said it wants to produce at least 20 percent of the world’s cutting-edge semiconductors by the end of the decade. The proposals also call for a focus on technologies such as quantum computing and cloud infrastructure.

The EU’s industry commissioner Thierry Breton has also recently met with Intel chief executive Pat Gelsinger and a top TSMC executive, as the bloc seeks added sway in the semiconductor supply chain.

Breton said the EU is looking to increase its “autonomy” while maintaining its position in the global supply chain.

The EU commissioner wants to persuade a major chipmaker such as Intel or TSMC to site a fabrication plant in the EU as part of the Digital Compass strategy.

The strategy aims to double Europe’s share of global semiconductor production to 20 percent by 2030, as well as bringing in production of the most advanced chips of the kind produced only by the likes of Intel, Samsung, TSMC and a handful of others.

The plan is in stark contrast to the current shortages that have exposed Europe’s reliance on chips made in Asia.

Chip shortages, induced by chaotic market conditions during the Covid-19 pandemic, have forced automakers to pause production in plants in Europe and around the world.

Unlikely outcome

But Taiwan’s Economy Minister, Wang Mei-hua, has poured cold water on the EU plans to convince TSMC to establish a factory in Europe.

“Regardless whether TSMC establishes production facilities or pursues cooperation in Europe, Taiwan will remain the home base for its most advanced technologies,” Wang was quoted by the Taipei Times as telling a joint meeting of the Taiwanese legislature’s Economics Committee, and Judiciary and Organic Laws and Statutes Committee.

Wang also played down the suggestion that TSMC might partner with the EU in its efforts to reach “chip sovereignty” with advanced nodes.

“TSMC will have to decide its global strategy and take commercial considerations into account when it comes to whether it establishes a plant in the EU,” she said.