DRESDEN, Germany — On a windswept construction site near Dresden Airport, 30 cranes sweep across the Saxon sky and roughly 1,200 workers swarm over what looks, for now, like an enormous concrete skeleton. A few years from now, if all goes according to plan, this will be one of Europe’s most strategically important semiconductor factories — and the centerpiece of the continent’s bid to regain control over a critical technology.

The plant is being built not by Taiwan Semiconductor Manufacturing Company, or TSMC, directly, but by the European Semiconductor Manufacturing Company GmbH, or ESMC, a joint venture created for the project. TSMC holds a 70 percent stake; German industrial heavyweights Bosch and Infineon, and Dutch chipmaker NXP Semiconductors, each own 10 percent.

Backed by more than €10 billion in investment, including up to €5 billion in German state aid approved under the European Chips Act, the Dresden fab is designed to supply the chips that power much of Europe’s economic backbone: cars, factories, and communications networks.

A Project Born of Shortages and Strategy

The genesis of the project traces back to the global chip shortages of the early 2020s, when car plants in Germany and elsewhere were forced to halt production as inexpensive but indispensable microcontrollers ran short. For Brussels and Berlin, that vulnerability crystallized into policy.

In 2023, TSMC and its partners announced the formation of ESMC and their intention to build a new 300-millimeter wafer fab in Dresden, Europe’s largest microelectronics hub and home to Infineon, GlobalFoundries and a dense cluster of suppliers. The joint venture framed the plant as a “European” fab in governance and footprint, but one that would run on TSMC’s process technology and production discipline.

On August 20, 2024, ESMC held a formal groundbreaking ceremony at Dresden’s Airport Park. The company confirmed plans for a total investment exceeding €10 billion — financed through equity, debt and substantial public subsidies — and a design capacity of 40,000 300-millimeter wafers per month once fully ramped. (TSMC)

Who Owns the Factory — and What It Will Make

ESMC’s ownership structure reflects Europe’s attempt to align industrial policy with market demand. TSMC brings the process technology, manufacturing know-how and global foundry experience. Bosch, Infineon and NXP contribute deep roots in European automotive and industrial markets — and, crucially, guaranteed demand for the fab’s output.

When the plant starts up, it will not be producing the cutting-edge smartphone or AI chips that have made TSMC famous. Instead, it will focus on “mature” but highly critical technology nodes between 12 and 28 nanometers on 300-millimeter wafers:

• 28/22 nm planar CMOS
• 16/12 nm FinFET

These processes are tailored to the needs of:

• Automotive electronics – driver-assistance systems, infotainment, powertrain and electric-vehicle control units.
• Industrial automation and robotics – control systems, sensors and actuators for factory equipment.
• IoT and telecommunications infrastructure – connectivity chips, networking equipment, and edge devices.

In volume terms, ESMC says the Dresden fab is designed for 40,000 wafers per month, which translates to nearly 500,000 wafers per year at full capacity — a significant boost for Europe’s supply of automotive and industrial semiconductors.

December 2025: A Giant in the Making

As of December 2025, the project is deep into its structural construction phase. After an extensive permitting process, Saxon authorities granted ESMC its first major high-rise building permit on September 18, 2025, allowing the company to proceed with the main fabrication building, energy supply installations and auxiliary structures.

One year after the groundbraking, the picture is starkly physical:

• The enormous base slab is largely complete.
• The structural frames for multiple buildings are rising.
• Around 30 cranes and roughly 1,200 construction workers are active on site.
• Approximately 155,000 cubic meters of concrete have already been poured, and about 600,000 cubic meters of soil excavated.

Local officials say the project remains on schedule. By 2026, the main buildings are expected to be “weather-tight,” with the installation of cleanrooms, utilities and production equipment slated to begin in the second half of 2026 and continue through 2027.

Opening Date and Jobs to Come

The timeline for production has not shifted publicly:

• Construction and fit-out: 2024–2027
• Tool move-in and line qualification: beginning in the second half of 2026, continuing through 2027
• Start of volume production: end of 2027 (often described as late 2027 or autumn 2027 in official and local planning documents)

Once operational, ESMC expects to create around 2,000 high-skilled, permanent jobs at the Dresden fab.

Many of those roles will be engineering positions, and the company has already begun partnering with local institutions — notably the Technical University of Dresden — to design semiconductor-focused curricula and to recruit and train personnel. TSMC has started sending German engineers to Taiwan for extensive hands-on training, following its established “buddy system,” in which each visitor is paired with a seasoned engineer.

A Magnet for an Already Dense Ecosystem

The Dresden fab is not rising in isolation. It is slotting into “Silicon Saxony,” one of Europe’s most mature semiconductor clusters, with roughly 83,000 employees and more than 3,600 companies already active across microelectronics, software and related fields.

Since TSMC confirmed its choice of Dresden, the region has seen a flurry of activity:

• GlobalFoundries announced a €1.1 billion expansion of its own Dresden plant, aimed at lifting its capacity to more than one million wafers annually by 2028, with support from the German government and the European Chips Act.
• Infineon is building its “MEGAFAB-DD” facility in the city, backed by €920 million of approved German state aid, with full operation targeted for 2031.
• The Saxon government has highlighted additional investments from companies such as Topco Scientific Co., a Taiwanese materials and equipment supplier, which plans to open a site in Dresden in 2026, citing TSMC’s arrival as a key factor.

Closer to the ESMC site itself, in Dresden’s Airport Park, local planners are reshaping roads and logistics capacity to handle the expected traffic of thousands of workers and a steady stream of chemicals, tools and wafer shipments. New logistics and industrial developments in the northern corridor are explicitly framed around serving the ESMC facility and its suppliers.

Officials in Saxony forecast that, when the dust settles, the broader semiconductor sector in the state could employ around 100,000 people by 2030, up from roughly 83,000 today — a growth trajectory that depends heavily on the gravitational pull of the TSMC-backed fab.

Europe’s Bet on “Good Enough” Chips

For European policymakers, the Dresden project is as much about resilience as it is about growth. The chip families slated for production here will not dominate headlines like AI accelerators or the latest smartphone processors. But they are precisely the components that can bring an automotive assembly line — or a factory floor — to a standstill if they fail to arrive.

By anchoring that production inside the European Union, with a governance structure that includes major European chipmakers and industrial users, the ESMC fab is meant to be both a supply-chain buffer and an engine of regional innovation.

Back on the construction site, the scale of that ambition is already visible in steel and concrete. Where 1,200 builders currently race to complete the shell, 2,000 engineers, technicians and operators are expected to follow — and, if Saxony’s forecasts are right, tens of thousands more in the surrounding ecosystem.

Whether this will be enough to meet Europe’s long-term goals — doubling its share of global chip production and insulating its industries from future shocks — remains uncertain. For now, Dresden is betting that a carefully targeted “workhorse” fab, backed by the world’s largest contract chipmaker and Europe’s leading industrial champions, is the right place to start. (zai)

Photo: ESMC