EU becomes largest foreign investor in Taiwan
The European Union has become the largest foreign investor in Taiwan, as it seeks to reduce its dependence on China, especially in the hi-tech sector.
“Big European companies are investing in traditional areas, to sell cars or machinery and also to support the Taiwanese semiconductor ecosystem,” said Lutz Gullner, head of the European Economic and Trade Office in Taipei, the EU’s de facto embassy.
“Our 27 member states have invested more in Taiwan than the U.S. and Japan combined. It is a partner you want to engage with across the entire AI ecosystem, including upstream – the components, raw materials and processed materials,” he said.
“The dependency runs both ways --- the shareholders of Imec, the Belgian nanoelectronics institute, include both ASML and TSMC. TSMC would not be able to produce what they are producing without ASML,” he said.
Based in the Netherlands, ASML makes machines that chipmakers use to mass produce microchips. Founded in 1984 with a handful of staff, it has grown to over 40,000 employees, 143 nationalities and more than 60 locations around the world.
Founded in 1984 and with its headquarters in Leuven in Belgium, Imec is the world's largest independent nanoelectronics and digital technology R&D hub and innovation centre.
One of the biggest EU investments in Taiwan is that of German science and technology company Merck KGaA. Last December it inaugurated a €500 million semiconductor materials "megasite" -- named Jade Park -- in Kaohsiung. Covering 150,000 square meters, it is Merck's largest semiconductor materials production site worldwide and is ramping up mass production this year.
It produces thin films, formulation materials, and specialty gases for advanced layering, etching, and patterning needed for AI, logic and memory chips. It aims to support key local partners like TSMC, meeting up to 80 per cent local thin-film demand, and boosting regional supply chain resilience.
Going the other way, TSMC is building a semiconductor fab in Dresden in eastern Germany, with an investment of more than 10 billon euros. TSMC owns 70 per cent, with 10 per cent held each by Bosch, Infineon and NXP. The plant broke ground in August 2024 and aims to start production by late 2027, to supply automotive and industrial chips.
It is backed by a €5 billion German state aid package under the European Chips Act, as well as equity and loans. Its planned output is 40,000 12-inch (300-mm) wafers per month.
In addition, Foxconn is partnering with two French firms, Thales and Radiall, in Tessalia Technology SAS in a joint venture worth over 250 million euros. It is based in Le Barp near Bordeaux, France and will make advanced semiconductor packaging for aerospace, defence and medical technology. The plant broke ground on June 1, 2026, with commercial production due to start in late 2029. Backed by the EU Chips Act, the plant aims to improve European technological sovereignty and reduce supply chain reliance on Asia.
The French government tried but failed to persuade TMSC to build its fab in France. This made the Tessalia project more urgent.
Sebastian Martin, Minister Delegate for Industry in the French government, attended the ground-breaking for the project.
He said: “Tessalia suits the national strategy of our government. It strengthens our sovereignty in a key sector.”
Taiwan’s representative in France. Hao Pei-chih, said that strategic sovereignty was a key objective of the ‘France 2030’ reindustrialisation plan of President Emmanuel Macron.
“Taiwan can be a co-operative partner in semi-conductors, AI and quantum computing,” she said. Also in Taiwan’s favour is that the EU wants to reduce its reliance on Chinese suppliers.
Despite the lack of diplomatic ties, relations between the EU and Taiwan are warm, with frequent visits by European politicians to Taipei. Gullner said that, at present, bilateral relations were their most intense ever. “Taiwan companies need to discover a lot about Europe and Europeans still need to discover a lot about Taiwan,” he said.
In 2025, Taiwan was the EU’s 13th largest trading partner, with total goods trade of 76.2 billion euros. The EU ran a trade deficit of 14.4 billion euros. The EU was Taiwan’s fifth largest trading partner, after China, US, Japan and South Korea.
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