On February 1st, Taiwan and the Czech Republic on Thursday signed a memorandum of understanding (MOU) on semiconductor cooperation.

During a seminar on semiconductor investments in the Czech Republic held in Taipei, Taiwan semiconductor material supplier TOPOC Scientific Co. teamed up with the Taiwan Eastbound Alliance - Landing America (TeaLa) to ink the agreement with the Czech National Semiconductor Cluster (CNSC).

J.W. Kuo, chairman of TeaLa and TOPOC, said since Taiwan Semiconductor Manufacturing Co. (TSMC) announced a plan in August 2023 to build a wafer plant in Dresden, Germany, Taiwan's semiconductor industry set its sights on investing in the Czech Republic, as the Germany city is close to the Czech border.

"With regional supply chain synergy and the Czech Republic's industrial and economic strength, coupled with its geographical advantage, the prospects for the semiconductor industry in the Czech Republic are promising," Kuo said in a statement.

TSMC has worked with Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. to set up a joint venture, called European Semiconductor Manufacturing Co. (ESMC), which aims to build a wafer fab in Dresden.

The Dresden project has secured strong support from the German government and its partners in the investment, with construction set to start in the second half of this year as planned.

The German plant is scheduled to start commercial production at the end of 2027, using the 12 nanometer, 16nm, 22nm, and 28nm processes to produce chips for automotive electronics and specialty industrial devices.

At the MOU signing ceremony, Kuo said in order to support TSMC's investment plan in Germany, its Taiwanese suppliers are expected to follow the chipmaker and go global.

Taiwanese suppliers to TSMC are likely to establish a foothold in the Czech Republic around 2025, providing services to the chipmaker and other major clients by taking advantage of the geographic proximity, he added.

TOPOC is studying the feasibility of making inroads into Europe to provide integrated services such as solutions to upstream foundry operators and backend IC packaging and testing services firms as well as logistics and warehousing services.

The Czech Republic should build science-based parks to push for advanced semiconductor technology development as Taiwan has done, Kuo suggested.

In Taiwan, Hsinchu Science Park in the north, Central Taiwan Science Park and Southern Taiwan Science Park are home to high-end fabs owned by TSMC and other major semiconductor giants.

Speaking at the seminar, Vice Economics Minister Chen Chern-chyi said Taiwan and the Czech Republic have shared values and mutual trust and have forged close business ties, in particular after direct flights were launched in 2023.

The Czech Republic has a good foundation in industrial development with a large pool of quality workers, so more than 25 percent of foreign investment has poured into the manufacturing sector, Chen said.

Taiwanese companies such as iPhone assembler Hon Hai Precision Industry Co., Pegatron Corp., a smaller iPhone assembler, contract notebook computer maker Wistron Corp. and PC brand Asustek Computer Inc. have already invested in the country, Chen added.

In November 2023, the Supply Chain Resilience Center, jointly established by Taiwan and the Czech Republic, opened in the European country to boost efforts to build a semiconductor supply chain.

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