TSMC apparently plans to set up its first chip manufacturing facility in Europe. Germany will be the location of its latest semiconductor factory, and the company is reportedly in talks with the German government about the plan.

According to a new report, the world’s largest contract chip manufacturer is in serious and deep negotiations with the German government to establish this new chip factory. According to sources familiar with the matter, the company’s move comes after the local government announced subsidies to support the investment. For those who don’t know, the European Union has unveiled the European IC law to ease rules on state funding to semiconductor factories, which have previously faced government aid bans.

One source added that the talks between TSMC and Saxony were “serious and advanced”. In addition, delegations from the territory of East Germany came to Taiwan to introduce this plan with the chip manufacturer. Building a modern semiconductor manufacturing facility is a significant investment, and the costs include labor. That’s why TSMC is discussing subsidies it can receive in exchange for setting up Europe’s first chip manufacturing facility in Germany.

According to the company’s official statement in December 2022, there is still no “concrete plan” to set up a chip manufacturing facility in the region. The governments of Germany and Saxony are ready to provide subsidies, but are also seeking additional funds from the EU because “no one will come without a subsidy,” according to one source.