Taiwan Semiconductor To Build Chip Design Center In Germany: Report

Taiwan Semiconductor Manufacturing Co. TSM plans to build a new chip-design center in Munich, Germany, to develop high-performance and energy-efficient chips for the automotive, industrial, and artificial intelligence sectors.

The hub, expected to open in the third quarter of 2025, was selected for its proximity to European clients, the Wall Street Journal reported on Tuesday, citing a company spokesperson.

Taiwan Semiconductor stock is down 2% year-to-date as it grapples with the Trump administration’s tariff policies, prompting it to ramp up investment in the U.S. without incremental subsidies.

Also Read: To Serve Exploding AI Chip Demand, Taiwan Semiconductor Plans 9 Advanced Factories

The center will add to Taiwan Semiconductor's global network of nine design centers spanning Taiwan, mainland China, Japan, Canada and the U.S.

Taiwan Semiconductor is building a 10 billion euro ($11.33 billion) microchip factory in the German city of Dresden as part of a joint venture with Infineon Technologies, Robert Bosch, and NXP Semiconductors NXPI called European Semiconductor Manufacturing Co. (ESMC).

The Dresden facility will initially focus on 22-nanometre node chips, primarily for automotive microcontroller units, with potential future expansions to produce more advanced semiconductor technologies.

Demand for chips in electric vehicles and industrial equipment has recently waned. The industry has been contending with an inventory glut as car makers and industrial equipment manufacturers stockpiled chips.

Taiwan Semiconductor reported first-quarter net sales of $25.53 billion (839.25 billion New Taiwanese Dollars), up 41.6% year-over-year, topping the analyst consensus estimate of $23.92 billion. Net sales declined 3.4% quarter-over-quarter. Net income and earnings per share were $361.56 billion New Taiwanese Dollars and 13.94 New Taiwanese Dollars per share (or $2.12), topping the analyst consensus of $1.82.  Taiwan Semiconductor’s AI technology moat helped it expand its quarterly gross margins by 572 bps to 58.8%.

Taiwan Semiconductor guided second-quarter 2025 revenue of $28.4 billion to $29.2 billion versus the $26.79 billion analyst estimate. It expects a gross margin of 57%-59%.

Commenting on tariffs on April 17, 2025, CFO Wendell Huang remarked, “While we have not seen any changes in our customers’ behavior so far, uncertainties and risks from the potential impact from tariff policies exist. We will continue to closely monitor the potential impact on the end market demand, and manage our business prudently.”

Price Action: TSM shares were trading lower by 0.77% to $196.15 premarket at last check Wednesday.

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