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TSMC says construction of first European plant on track to start in fourth quarter

FILE PHOTO: Logo of Taiwan Semiconductor Manufacturing Co (TSMC), in Hsinchu

By Toby Sterling

AMSTERDAM (Reuters) -Taiwanese chipmaker TSMC plans to start construction of its first European facility in the fourth quarter of 2024, it said on Tuesday.

At a conference in the Netherlands, TSMC's European chief Paul de Bot said the facility in the German city of Dresden, known as European Semiconductor Manufacturing Co (ESMC), was on track for construction to begin this year with production in 2027.

Last August TSMC announced plans for the $11 billion factory in Germany, with Infineon , NXP, and Robert Bosch each taking a 10% stake.

Kevin Zhang, who oversees TSMC's international operations, told reporters he believes a subsidy for the facility under the European Chips Act will be approved, though that has yet to happen.

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"We have very strong European government -- European Union -- and German government backing, we're very confident we should be able to get good support there."

"It's a very exciting time for (the) European Semiconductor ecosystem ... (with TSMC coming) directly to the backyard of major automotive customers."

Zhang said the Dresden fab would produce chips at the 22 nanometre production node, which it first introduced in the mid 2010s.

ESMC will "allow us to basically bring the most advanced MCU technology to the heartland of automotive use," he said, referring to microcontroller units which are used throughout cars to control windows, windshield wipers, brakes, sensors and more.

He did not rule out later expanding TSMC's investments in Europe to include plants capable of making more advanced chips, though that would have to be some years away.

He noted the company began building its first plant in Japan in 2021 and this year it announced plans for a second, more advanced Japanese plant.

($1 = 0.9276 euros)

(Reporting by Toby Sterling, writing by Bart Meijer; Editing by Kirsten Donovan and Susan Fenton)