A year abroad is not a compulsory part of TSM German. However, it is very strongly advised, and an aspect of languages degrees particularly valued by employers.
In fact, virtually all students taking TSM German do in fact spend a year abroad during their course. This may be in the second or third year.
It can be spent at a German-speaking University: there are exchanges with Köln, Göttingen and Konstanz, and the German Academic Exchange Service also offers scholarships which may be held at any German university. There are opportunities at Austrian and Swiss universities too. Other students take a year out and work in Germany e.g. as language assistants in schools or find a commercial placement.