Taiwan Semiconductor Manufacturing Company (TSMC) closed in on approval from its board to build a chip factory in Germany, part of the country’s €20 billion push to develop its local semiconductor ecosystem.

The government is set to provide €5 billion for the facility in Dresden, which TSMC will share with Bosch, Infineon and NXP under a joint venture agreement, according to Reuters.

TSMC has been in talks with Germany to set up a factory in the country since 2021, Reuters stated, and the Dresden facility will largely be used to produce chips for the automotive industry.

The company’s board of directors is expected to clear the move at a meeting on Wednesday, after which TSMC will sign a letter of intent with Berlin authorities to formalise funding for the establishment.

The final decision will then be made by the European Commission.

Out of Germany’s €20 billion investment pot, €10 billion has been allocated to support the construction of Intel’s manufacturing site in Magdeburg.

A separate state fund worth €750 million is tipped to be given to a joint R&D centre by German automotive supplier ZF Friedrichshafen and US chipmaker Wolfspeed.