German state signs deal with Taiwan chip giant

German state signs deal with Taiwan chip giant

Germany's Saxony state on Tuesday signed an agreement with Taiwanese chip giant TSMC to train German students in an effort to meet the growing demand for workers in the semiconductor industry.

A shortage of skilled workers, including in the vital chip sector, has emerged as a major concern for Germany, Europe's largest economy, as vast numbers of older employees retire.

The Taiwan Semiconductor Manufacturing Company, which controls more than half of the world's chip output, announced a new $3.8 billion chip factory in Dresden, Saxony's capital.

The agreement, signed by TSMC, Saxony and Dresden University of Technology, is specifically designed to train German STEM students for careers in the semiconductor industry, the Taiwanese firm said in a statement.

Up to 100 high-achieving students from the state will visit Taiwan for a six-month exchange programme and collaborate with Taiwan's top universities.

The first students will be graduating in February 2024, according to TSMC.

Market research has shown a need for more than one million skilled workers in the chip industry, said Lora Ho, TSMC's senior vice president of human resources.

Construction on TSMC's Dresden facility, which will focus on automotive chips, is scheduled to begin next year, with production starting by the end of 2027.

It is expected to create around 2,000 direct high-tech jobs.

Saxony's State Minister for Science Sebastian Gemkow, a spokeswoman for the state, told AFP on condition of anonymity.

s reason we started very early to structure this process so TSMC and later ESMC will have all the employees that it needs, he said, referring to the European Semiconductor Manufacturing Company.

ESMC is a joint venture between TSMC, Germany's Bosch and Infineon, and the Dutch firm NXP, which will build the Dresden plant.

TSMC's production has increased beyond Taiwan as Western powers lines have raised concerns about the chip industry, critical for the modern world economy, being centred on an island that China claims as its territory.

In recent years, Beijing has seen heightened political and military pressure on the island, causing fears about the global semiconductor supply chain.