Germany’s Saxony to Send Interns to TSMC to Foster Chip Talent

Jane Lanhee Lee and Debby Wu, Bloomberg News

Signage for Taiwan Semiconductor Manufacturing Co. (TSMC) during the company's annual shareholder meeting in Hsinchu, Taiwan, on Tuesday, June 6, 2023. TSMC's capital expenditure for 2023 will wind up closer to $32 billion, approaching the lower end of a forecast range as it grapples with a persistent chip demand slump. Photographer: I-Hwa Cheng/Bloomberg , Bloomberg

(Bloomberg) -- The German state of Saxony and Taiwan Semiconductor Manufacturing Co. are working together on an exchange program that will bring Dresden students to Taiwan for internships in a push to foster chip talent.

State-backed TU Dresden will send around 50 students every year to study at universities in Taiwan for three months starting in the spring of 2024, followed by a three-month internship at TSMC to get hands-on experience, University President Ursula Staudinger said on Tuesday. National Taiwan University will be the first university in Taiwan to participate in the program, she said.

Staudinger spoke at a ceremony to open a Saxony-funded liaison office in Taipei, set up to attract Taiwanese students to study at Dresden’s universities as part of a broader cooperation agreement between TSMC, Saxony and TU Dresden.

There’s a sense of urgency in Saxony about fostering new talent. Some 28% of electrical engineering experts and 33% of engineering supervisors in Germany’s semiconductor sector will reach retirement age within the next 10 to 12 years, according to a study from the research institute IW Koeln.

For the whole of Germany, the sector reported a shortage of 62,000 employees between June 2021 and June 2022. With the population graying and fewer Germans entering the workforce, “there’s still a huge need for foreign skilled labor,” a spokesperson from Germany’s Labor Ministry previously told Bloomberg.

TSMC has agreed to build a €10 billion ($11 billion) plant in eastern Germany in partnership with Infineon Technologies AG, NXP Semiconductors NV and Robert Bosch GmbH.

The planned fab will be 70% owned by TSMC, which will operate the facility in Dresden, with Infineon, NXP and Bosch each holding a 10% equity stake, subject to regulatory approval.

Slated to begin production by the end of 2027, it will provide chips for the automotive and industrial sectors and is a first step for TSMC in establishing a major European production site to counter risks from rising tensions in the Taiwan Strait.

It’s also another coup for Chancellor Olaf Scholz’s ruling coalition, which has agreed to €10 billion in aid for a new Intel Corp. plant in Magdeburg in a push to shore up the country’s tech sector and secure supplies of critical components. The government will provide as much as €5 billion in subsidies for TSMC’s Dresden factory.

The Taiwanese company said in a separate statement that it will contribute €3.5 billion to the project, dubbed European Semiconductor Manufacturing Company GmbH. Total investment is expected to amount to more than €10 billion, including “strong support from the European Union and the German government,” and it will create about 2,000 direct high-tech jobs, the companies said.

--With assistance from Vlad Savov.