TSMC and three European chipmakers are building a semiconductor fab in Dresden through a joint venture called European Semiconductor Manufacturing Company (ESMC). The project is expected to cost more than €10 billion, including a €5 billion German state-aid measure approved by the European Commission. Its original target was to begin production by the end of 2027, but TSMC’s later disclosures do not confirm that date as a current commitment.
Where is TSMC building its German fab?
The fab is being built in Dresden, in the German state of Saxony. TSMC, Bosch, Infineon and NXP formed ESMC to develop and operate the project. A 2025 TSMC filing identifies approximately 513,557 square metres of ESMC land in Dresden. TSMC’s annual reports
TSMC announced the joint venture on 8 August 2023. It planned to own 70% of ESMC, with Bosch, Infineon and NXP each holding 10%; the fab is to be operated by TSMC. The companies said the project would strengthen manufacturing access for European customers and partners, particularly in automotive and industrial markets. TSMC’s joint-venture announcement
How much will the Dresden fab cost, and who is paying?
The announced total investment is expected to exceed €10 billion. That is the project’s overall expected investment, not a statement that the German government alone is paying for the facility. On 20 August 2024, the European Commission approved a €5 billion German state-aid measure for construction and operation of the fab under EU state-aid rules. European Commission approval
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The €5 billion figure describes approved aid; it should not be confused with the total project cost or treated as evidence that all funding has already been disbursed. The public announcement establishes the aid measure and its purpose, while the project announcement gives the expected investment total. The available disclosures do not specify a full breakdown of every partner’s contribution.
What chips will the ESMC fab make?
ESMC plans to manufacture chips using 28/22-nanometre planar CMOS and 16/12-nanometre FinFET processes. These are not the newest leading-edge processes used for the most advanced smartphone or AI processors. They are suited to specialty applications, including automotive and industrial semiconductors, which are the markets TSMC identifies as the facility’s focus. ESMC groundbreaking release
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When fully operational, the fab is expected to produce 40,000 300 mm (12-inch) wafers per month. That is a planned full-operation capacity, not output at the start of production. ESMC described the project as the EU’s first FinFET-capable pure-play foundry, meaning a foundry that manufactures chips for customers rather than selling its own branded chip designs.
When will construction finish and production begin?
The original 2023 announcement targeted construction in the second half of 2024 and production by the end of 2027. ESMC held its groundbreaking ceremony in Dresden on 20 August 2024, marking the start of initial land preparation. ESMC groundbreaking release
TSMC’s 2025 annual-report website says construction began in 2024 and that its European plans were progressing smoothly. Its 2026 annual general meeting minutes likewise say the Dresden plans were progressing smoothly and reiterate the focus on automotive and industrial applications. Those later disclosures do not announce a newer production start date. Treat the end-of-2027 date as the original target, not a guaranteed commissioning date. TSMC annual-report website TSMC annual general meeting materials
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why does the project matter to European chip supply?
TSMC says the Dresden investment is intended to bring its manufacturing capabilities closer to European customers and partners. With the planned processes and customer focus, the fab is aimed at automotive and industrial semiconductor needs rather than the very latest consumer-electronics chips. The joint venture brings together a global foundry operator and three established European semiconductor companies, while German state aid and the Commission’s approval place the project within a broader EU effort to expand semiconductor capacity and expertise. European Commission approval
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For buyers of cars and industrial equipment, the project’s relevance is regional manufacturing capacity for selected chip technologies—not a promise that every component will be made in Dresden or that supply disruptions will disappear. ESMC’s disclosed capacity is a target for the fully operational fab; the project’s eventual output and start date remain dependent on construction and ramp-up.
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