TAIPEI (Taiwan News) — The board of directors of Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly expected to vote in favor of building a fab in Dresden, Germany on Tuesday (Aug. 8), German government sources told German newspaper Handelsblatt.

The German government will provide TSMC with 5 billion euros (NT$174 billion) for the project, Reuters cited Handelsblatt as saying. The Taiwanese chipmaker has been in talks with the German state of Saxony about constructing a facility in Dresden since 2021, per Reuters.

TSMC will run the factory in a venture with Bosch, Infineon, and NXP, sources told Handelsblatt. After TSMC’s board gives their approval, the company could sign a letter of intent with Germany regarding funding, with the ultimate decision to be made by the European Commission, Handelsblatt said.

While the majority of TSMC’s production capacity is still focused in Taiwan, the company has been extending its overseas capacity. It is currently building fabs in the U.S. and Japan.