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Dresden. There have been several ground-breaking ceremonies for new factories in Saxony this year. But the most spectacular was the one for TSMC's 10 billion chip factory in Dresden on August 20. The Taiwanese company, which is the world's largest contract manufacturer and transfers chip designs onto wafers, has founded a joint venture called ESMC with its European customers Infineon, Bosch and NXP in order to meet the semiconductor requirements of the automotive industry. Not only the CEOs of the chip manufacturers involved, but also EU Commission President Ursula von der Leyen and German Chancellor Olaf Scholz attended the laying of the foundation stone in the north of Dresden. This is because half of the investment sum, i.e. five billion euros, will be paid by taxpayers as subsidies. On the day of the ground-breaking ceremony, the EU Commission approved the subsidies on the basis of the European Chip Act (EU Chips Act) - the first of a total of four projects applied for in Germany. The EU Chips Act allows very generous subsidies for the semiconductor industry in order to double the market share of European production to 20 percent by 2030.
20.08.2024, NA, Dresden: Maarten Dirkzwager (l-r) from NXP Semiconductors, Saxony Minister President Michael Kretschmer (CDU), EU Commission President Ursula von der Leyen (CDU), TSMC CEO C.C. Wei, Federal Chancellor Olaf Scholz (SPD), ESMC President Christian Koitzsch, Infineon CEO Jochen Hanebeck and Dresden's Lord Mayor Dirk Hilbert (FDP) stand together at the symbolic groundbreaking ceremony for the ESCM chip plant.
Source: Jasmin Beisiegel/dpa
Four months later, of the four EU chip projects, only the two in Dresden are still being pursued - the construction of the ESMC factory and Infineon's Fab4. The German chip manufacturer is investing five billion euros in Fab4, with one billion euros coming from the state. The two US companies Intel and Wolfspeed have put their projects in Magdeburg and Saarland on hold.
According to ESMC, earthworks began as planned on October 14 and are progressing well thanks to the mild weather. The excavation pit for the factory is already more than halfway excavated, they say. More than 100 workers are currently employed on the construction site. Construction of the building is due to begin in the spring. The team on site is also growing steadily to currently over 30 employees. A third of these were sent to Dresden from Taiwan by TSMC. A total of 2,000 jobs are to be created at the plant. Training programs have already begun in order to be able to fill them by the end of the factory's ramp-up phase in 2029. The first 30 students completed the Semiconductor Talent Incubation Program Taiwan ("STIPT" for short) this year. A further 50 students have already been nominated by the Saxon universities for the coming year. The state government is also working to secure the workforce. The state plans to establish a microelectronics training campus in Radeberg, where around 1,000 training places will be available each year from 2028/2029.
100,000 jobs in Saxony's semiconductor industry
Around 70,000 people already work in Saxony's semiconductor industry. According to estimates by the industry association Silicon Saxony e.V., the number of jobs will rise to around 100,000 in the next six years. The jobs are not all created in the large chip factories, but in the entire ecosystem of suppliers, service providers and research institutes. TSMC has also asked its most important suppliers to follow them to Europe with a number of subsidiaries. "In 2025/2026, we need to focus more on attracting suppliers," demands Frank Bösenberg, Managing Director of Silicon Saxony e.V. He sees it as positive that Dresden is finally working more closely with the surrounding municipalities in the "Dresden Experience Region" association. But it should not take six months to clarify the availability of commercial space. It needs to happen faster. "We need a master plan for the greater Dresden area as soon as possible," said Bösenberg.
More feeder flights to Frankfurt and Munich
In this plan, the infrastructure requirements for commercial space, education and transportation as well as housing construction would have to be coordinated for the next 10 to 15 years. The industry association insists on strengthening Dresden Airport. A direct flight connection from Dresden to Taipei is not needed, but sufficient feeder flights to Frankfurt am Main, Zurich and Munich are required. More direct train connections to the airports in Berlin and Prague are also needed.
100 workers are currently at work on the construction site for the ESMC chip factory in Dresden.
Source: PR/ESMC
Saxony has no time to lose, because there is competition. The Czech Republic is trying very hard to get TSMC suppliers to settle in their country. However, Bösenberg does not see this as a problem. "We have the luxurious situation that the cake is getting bigger and we can give something away with a clear conscience," says the cluster manager. He assumes that some companies will move to neighboring countries, while others will move closer to the chip factory in Dresden. From the point of view of the industry network, this is perfectly fine. "The main thing is that the projects are perceived internationally as a success," says Bösenberg.
When it comes to attracting investors, we are in competition with both the Czech Republic and all other regions. - Thomas Horn, Head of Saxony Economic Development Corporation
Thomas Horn, head of Wirtschaftsförderung Sachsen GmbH, also sees new starting points for cooperation with the Czech Republic in the future, for example with regard to chemicals from the North Bohemia region. "But when it comes to attracting investors, we are in competition with both the Czech Republic and all other regions in the world," Horn emphasizes.
Bösenberg is also positive about the coalition agreement between the new state government of the CDU and SPD with regard to microelectronics. He is pleased with the "certain continuity" promised in supporting the industry as well as the agreed goal of expanding research and development capabilities in chip design and advanced packaging. These are the right steps. It is not yet really clear what the "control structure" for coordinating processes mentioned in the coalition agreement will look like.
Frank Bösenberg, Managing Director of the high-tech network Silicon Saxony e.V., now also speaks for Silicon Europe and wants to do more to promote the interests of smaller semiconductor companies.
Source: Silicon Saxony/TOMMY HALFTER
Saxony's semiconductor location, already the largest in Europe, will continue to grow. The application deadline for a further two-billion-euro funding program from the German government runs until 10 January 2025. "We are definitely expecting applications from Saxony," says Bösenberg, who recently became Chairman of "Silicon Europe", the organization representing the interests of smaller companies in the semiconductor industry. In this new position, he wants to work to ensure that calls for proposals for funding programs become more SME-friendly in the future so that it is not always just the big players who benefit from subsidies. "A deadline of six weeks over Christmas and New Year is not enough for such a complex application process," criticizes the Silicon Saxony boss.
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