Chipmaker TSMC says too early to comment on Germany’s expansion

TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co Ltd (TSMC) said on Monday it was too early to say whether it will build factories in Germany and that talks are still in their infancy, while the EU seeks to reduce chip imports amid a supply shortage.

The European Commission has had talks with global chip giants, including Intel and TSMC, as the EU seeks to boost semiconductor production and protect itself from shocks in the global supply chain.

Taiwan and TSMC, the world’s largest contract chip maker, have become pivotal in efforts to address the pandemic-induced chip shortage that has forced automakers to cut production and hurt smartphone makers, laptops and even household appliances.

“We are currently conducting serious reviews on Germany, but we are still in its early stages,” TSMC chairman Mark Liu told an annual meeting of shareholders when asked about building the ‘chip manufacturing factories in the EU country.

“We are continuing to communicate with our major customers in Germany to see if this is the most important and effective for our customers,” he said. “It’s too early to tell.”

TSMC in July announced plans to build new factories in the United States and Japan over concerns over the concentration of chip manufacturing capacity in Taiwan, which produces many of the most advanced chips in the world and is geographically close to its political rival, China.

Regarding TSMC’s $ 12 billion plant in the US state of Arizona, Liu said the expansion will support customer demand, especially in infrastructure and national security.

“Customers are the backbone of our global expansion. We will act very cautiously,” Liu said, adding that the company’s customers would help share the costs of overseas operations.

TSMC this year announced plans to invest $ 100 billion over the next three years to increase capacity, taking advantage of what it called “several years of growth opportunities” as the COVID pandemic -19 and new technologies have driven global demand for advanced chips.

(Reporting by Yimou Lee. Editing by Gerry Doyle)