Taiwan's semiconductor supply chain expands, connecting the European chip triangle
TechNews
February 08, 2025
Author: Central News Agency Liu Qianling, Su Siyun, Luo Yuanjun, Pan Ziyu
February 08, 2025
Author: Central News Agency Liu Qianling, Su Siyun, Luo Yuanjun, Pan Ziyu
In the freezing cold of December 2024, Minister of Economic Affairs Chih-hui Kuo flew across half the globe to the European continent. After completing an inspection of TSMC's German plant, he immediately rushed to the Czech Republic to unveil the Prague Taiwan Trade and Investment Center. The Ministry of Economic Affairs will use TSMC's German plant as the axis to deploy service bases in Europe, with the Czech Republic as the first stop, to take the lead in laying out the strategic fortress of the Central and Eastern European chip triangle.
Regarding the first time that Taiwan's official service base has set up camp in mainland Europe, Kuo Chih-hui said that in the future the service center will be expanded to other fields such as AI and ICT. It will not only support the semiconductor supply chain in Dresden, Germany, but also assist Taiwanese manufacturers in developing the ICT industry in Poland. It can also provide one-stop services for Taiwanese manufacturers investing in Central and Eastern Europe or other EU member states.
Europe is far away from Asia and has never been a popular investment destination for Taiwanese manufacturers. However, the situation has changed with TSMC's establishment of a factory in Germany, which has even led to changes in the map. The trend of global layout of Taiwan's semiconductor supply chain has become the driving force for the formation of the European chip triangle.
In addition to Germany, where TSMC is headquartered, neighboring Czech Republic and Poland have also ignited their ambitions to catch up with the semiconductor manufacturing train. Especially in the Czech Republic, industry, government and academic delegations frequently travel between Taipei and Prague, and the intensity of political, economic and industrial exchanges between Taiwan and the Czech Republic is higher than before.
Taiwanese manufacturers are facing the world, and the Ministry of Economic Affairs, the industry's nanny, has also started preliminary work. Kuo Chih-hui, who came from a private enterprise background, is positive about helping Taiwanese manufacturers layout their global supply chains. In addition to the official negotiation itinerary at the EU headquarters, Kuo Chih-hui's trip to Europe also followed Taiwan's footprint in the European semiconductor supply chain. After visiting TSMC's ESMC plant in Germany, Kuo Chih-hui and his party crossed the border and arrived in Usti, an industrial area in northern Czech Republic.
Üstí is less than an hour's drive from Dresden. The official who accompanied Guo Zhihui on the inspection said that the Üstí Industrial Zone was established mainly in response to the development of the automobile and machinery industries in the 1980s. Therefore, the factory structure is relatively old. At present, it is necessary to work closely with the Czech Republic to take stock of the investment needs of manufacturers and gradually promote it.
However, officials from the Ministry of Economic Affairs admitted that although Ústí is close to Dresden and has a geographical advantage, Brno, the second largest city in the southeast of the Czech Republic, has already gathered Taiwanese electronic manufacturing service (EMS) manufacturers such as Inventec, Wistron and Pegatron. In addition, Brno has a university town and the existing industrial cluster effect, which makes it easier to attract Taiwanese manufacturers to settle in based on objective conditions.
The Czech Republic is striving to transform its industry and be included in the chip value chain. Its neighbor Poland is not lagging behind. Paweł Pudłowski, vice president of the Polish Investment and Trade Agency, bluntly stated that international automobile manufacturers such as Mercedes-Benz and Toyota have complete assembly lines in Poland, and the battery production supply chain is also rooted here. Poland wants to use its own advantages to extend its layout in semiconductors.
There are currently 14 special economic zones across Poland. As the main engine for attracting investment, companies settled in these zones can enjoy business tax exemptions and reductions, actively attracting investment.
Polish workers are known for their diligence and hard work. According to the results of a survey conducted by the European Statistical Office in 2023, the average working hours per week per person of working age in the EU is 36.1 hours, while Poland is 39.3 hours. Compared with other countries, it is among the top three countries with the highest working hours. The basic salary in Poland is 4,300 zlotys, which is equivalent to about NT$34,000. The starting salary in Germany is 2,150 euros, which is about NT$74,000. The salary in Germany is equivalent to twice that of Poland. It can be seen that Poland has advantages in both working hours and wages.
Regarding Taiwan's investment in the European chip triangle, officials from the Ministry of Economic Affairs analyzed that TSMC's German factory is expected to start mass production in 2027. According to preliminary inventory, Taiwan's factories such as factory affairs, warehousing and logistics may be located in Germany and the Czech Republic. To assist Taiwanese companies in their investment plans, the Czech Ministry of Trade and Industry's Investment Promotion Bureau will cooperate with Taiwan's service center to promote license certification, assist in investment, and resolve administrative laws through official windows.
Petr Očko, Director General of the Czech Ministry of Trade and Industry, also promised to fully cooperate with the entry of Taiwanese manufacturers and plan to establish a welcome center for Taiwanese investors. He will arrange staff who understand the operations of both Taiwan and the Czech Republic and can speak Chinese to help Taiwanese manufacturers settle in the Czech Republic and give both sides more opportunities to understand each other's culture.
The situation in Europe has changed rapidly in recent years. Russia's invasion of Ukraine in February 2022 triggered a war, which also had a considerable impact on Europe's energy, manpower and the overall economy. The Czech Republic, located in Central Europe, also hopes to break the status quo.
As for the Czech Republic, officials from the Ministry of Economy believe that the country is currently in a period of industrial transformation. Although it has an industrial foundation, the pace of transformation is relatively slow. It also has problems such as long-term reliance on German technology that need to be overcome. In addition, Europe is facing an overall recession recently. The Czech Republic wants to find a new path in economic development and cooperate with Taiwan to develop in the direction of Asia's advanced manufacturing industry.
The Czech automobile industry has advantages in development. It not only has its own brand, but can also export automobile parts. In the past, it also has a certain capacity for the development of heavy industry and machinery. In the future, it can cooperate with Taiwanese semiconductor companies in automotive chip design, and cooperation in software applications is also worth looking forward to.
At the same time, the Czech Republic has also launched a national semiconductor development strategy. Regarding the direction and possible methods of cooperation with Taiwan, officials believe that Taiwan's wafer foundries are very flexible, and in the future, the Industrial Technology Research Institute will be asked to serve as a communication window to figure out how to match Taiwan's wafer foundries with the Czech IC design industry. In particular, the Czech automotive industry has a foundation for development. If it can be combined with Taiwan's wafer manufacturing advantages, the CP value of cooperation between the two sides will be very high, which will also help the development of the Czech Republic's own car factories and manufacturing industries.
However, the most important thing in developing the manufacturing industry is work culture, which may become a challenge for Central European countries such as the Czech Republic and Poland that want to join the semiconductor supply chain.
Image source: shutterstock
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