Upon implementation of the European Chips Act, TSMC and Intel are enticed to make substantial investments in Europe, whereas Samsung Electronics maintains a wait-and-see attitude and has not actively expressed its European investment position.
Market and industry observers are curious as to whether Samsung will follow in the footsteps of Intel and TSMC and build its next fab in Europe. Several European countries have reportedly extended an olive branches to Samsung. When the Spanish prime minister, Pedro Sanchez, visited South Korea in November 2022, it was widely reported that he met with the chairman of Samsung, Lee Jae-yong, and actively invited Samsung to build a fab in Spain.
Kye Hyun Kyung, director of the device solutions division at Samsung Electronics, has recently traveled to Germany, Switzerland, the Netherlands, and other European countries to assess the local business climate, but the company's stance on establishing a semiconductor factory has not yet been announced, according to industry sources.
Samsung is still adopting a wait-and-see approach because Europe lacks the conditions necessary to implement advanced manufacturing processes, the sources said. The Korean chip vendor is building gigafabs South Korea and the US, nevertheless.
Samsung's foundry division primarily serves fabless chipmakers in the US and China. In terms of its memory business, Samsung relies heavily on the Chinese market, which produces more than half of the world's smartphones. On the contrary, Samsung's customers in Europe are primarily automakers, and the profitability of automotive semiconductors, with the exception of few cutting-edge products, is still low, the sources indicated.
Moreover, although Europe has expertise in chipmaking equipment and talent pool, personnel and land costs are quite high, posing a significant barrier to the development of Samsung's fab in the region, the sources noted.
However, with the accelerated growth of small and medium-size IC design companies in Europe's cutting-edge industrial market, their significance in the global semiconductor industry is growing. Active investments by Intel and TSMC would exert pressure on Samsung, the sources said.
Samsung will maintain its "static brake" stance and evaluate the pros and cons of establishing fabs in Europe, according to the sources.
Intel has just announced that the German federal government and the company have signed a revised letter of intent for Intel's planned leading-edge wafer fabrication site in Magdeburg, the capital of Saxony-Anhalt. Intel's investment in the site is anticipated to exceed EUR30 billion (US$32.8 billion) for two fabs under the terms of the agreement. And just prior to this announcement, Intel disclosed plans to establish a new semiconductor assembly and testing facility in Poland. This facility will help Intel meet a critical capacity demand for assembly and testing by 2027.
TSMC is still negotiating with government officials over the size of the subsidy it will receive to invest in the construction of a new fab in Dresden, Germany. According to recent reports, the fab will be built in collaboration with TSMC's local partners in Europe, using a model analogous to its ongoing fab project in Japan.
Article translated by Jessie Shen
