Taipei, Dec 14 (IANS): Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract manufacturer for chips, is in early talks with the German government about potentially establishing a plant in the European country.

According to TSMC senior vice president of Europe and Asia sales Lora Ho, various factors like government subsidies, customer demand and the talent pool, would influence its final decision, reports Taipei Times.

In June, TSMC Chairman Mark Liu told shareholders that the chipmaker had begun assessments on setting up manufacturing operations in the European country.

TSMC has underway to build up new capacity around the world including a $7 billion semiconductor factory in Japan, as well as a $12 billion facility in Arizona set to start mass production in early 2024.

Meanwhile, TSMC has begun pilot production of 3-nanometer chips, and expects to be producing them in volume at the end of 2022.

TSMC has kicked off pilot production of chips built using N3 (namely 3nm process technology) at its Fab 18 in southern Taiwan.

Currently, Apple uses TSMC's 5nm processors for the M1 chips and it is expected that TSMC's 3nm processors will power the next generation of Apple Silicon.

Compared with the 5nm process, the 3nm gate-all-around (GAA) node boosts performance by 30 per cent, lowers power consumption 50 per cent and takes up 35 per cent less space.