TSMC’s $3.83B Investment in Germany Strengthens Taiwan-EU Relations

Taiwan semiconductor company TSMC’s €3.5 billion ($3.83 billion) investment in Germany is set to strengthen ties between Taiwan and Europe, according to Taiwan’s Economy Minister Wang Mei-hua. The investment comes at a crucial time for Taiwan, which faces increasing pressure from China to accept its sovereignty claims over the island. Wang highlighted that TSMC’s move into Europe will promote closer cooperation between Taiwan and the EU, similar to the strengthening relationship between Taiwan and the US. While Taiwan has been pushing for a Bilateral Investment Agreement (BIA) with the EU, talks on the matter have not progressed since 2015. Nevertheless, Wang believes TSMC’s investment will drive deeper engagement between Taiwan and European countries. The investment is subject to approval by Taiwan’s economy ministry, but given that the German factory will produce less advanced chips for the auto industry, rather than high-end, more profitable chips, approval is likely. TSMC has repeatedly stated that its most advanced manufacturing and research will remain in Taiwan, but it aims to increase chip production abroad to strengthen supply chains and increase resilience.