Sources: EU is considering a deal with TSMC or Samsung to build an advanced semiconductor factory in Europe in an attempt to avoid relying on the US and Asia
Context & Ripple Effects
This report lands a month after Intel's talks with TSMC and Samsung to outsource high-end chip production, which showed even the West's incumbent chipmaker leaning on Asian foundries. The EU's move is the policy mirror image: rather than accept that dependence, Brussels is weighing paying TSMC or Samsung to put an advanced fab on European soil. The corpus shows where this led — by late 2022 TSMC was in advanced talks with suppliers about a Dresden plant, and chemicals suppliers were planning European entry by 2023, arguing EU chipmakers' supply chains had atrophied.
First-order effects
- The EU gains a path to leading-edge capacity on its own territory, reducing its stated reliance on US and Asian supply for advanced chips.
- TSMC or Samsung would win a subsidized European beachhead — and, as the Intel talks show, the same foundry duopoly is already absorbing outsourced high-end demand.
Second-order effects
- Suppliers follow the fab: TSMC's chemicals suppliers signaled plans to enter Europe, pricing and locating around the anchor plant rather than around incumbent EU chipmakers.
- Incumbent European and US players face a foundry landscape where TSMC and Samsung set the terms both as suppliers to Intel and as state-backed builders in Europe.
Third-order effects
- The Dresden arc suggests the binding constraint on sovereign fabs is not the deal but the operating environment — by 2025 TSMC's Taiwanese suppliers were struggling with the EU's complex permitting, labor, and environmental rules at the €10B Germany plant, a friction that could shape how eagerly other foundries accept state invitations.
- If the pattern holds, chip capacity becomes a negotiated instrument of statecraft, with regions bidding foundries to locate — and foundries weighing regulatory burden against the strategic premium.
The trend: Governments are treating advanced foundry capacity as sovereign infrastructure, courting TSMC and Samsung to build at home while the foundry duopoly consolidates leverage over both customers and states.