Taiwanese semiconductor manufacturer TSMC's board of directors will decide in favour of building a factory in the German city of Dresden, the Handelsblatt daily reported on Monday, citing government sources.
The German government will support the construction of the factory with 5 billion euros ($5.49 billion), according to the sources.
The German economy ministry declined to comment on the report.
TSMC, the world's largest contract chipmaker, has been in talks with the German state of Saxony since 2021 about building a fabrication plant, or "fab", in Dresden.
It will operate the factory in a joint venture with partners Bosch, Infineon and NXP, the sources told Handelsblatt.
After the board gives the green light, TSMC, which plans to use the Dresden plant primarily to produce chips for the automotive industry, could sign a letter of intent with Berlin on the funding, with the final decision to be made by the European Commission, according to the report.
TSMC is one of several chipmakers, including Intel and Wolfspeed, seeking to draw on government funding to build factories in Europe.
Brussels and EU member states are pushing for home-grown production by offering billions in state subsidies to cut dependency on Asian suppliers and ease a global chip shortage which created havoc for carmakers.
($1 = 0.9108 euros)
