Microelectronics

The semiconductor industry is flying high. The German government must find solutions.

While the international semiconductor industry, its suppliers and service providers are celebrating excellent figures and a real industry boom at Europe’s largest microelectronics trade fair, SEMICON Europa in Munich, the German Federal Government has been dealt a blow by the Federal Constitutional Court. The Second Supplementary Budget Act 2021 is incompatible with Art. 109 Para. 3, Art. 110 Para. 2 and Art. 115 Para. 2 of the German Basic Law (GG). Nevertheless, the Federal Chancellor remains committed to the three major microelectronics projects in Saxony, Saxony-Anhalt and Saarland, and Saxony’s Minister President Kretschmer and Saxony-Anhalt’s Minister President Haseloff were also positive. Europe has ambitious plans to gain an important share of the international semiconductor market and to defend Germany’s reputation as a reliable investment location and partner. Quick action is now required to achieve this, as it is ultimately important to keep up the “German pace” that Chancellor Olaf Scholz has so often invoked.

Eröffnung der SEMICON Europa 2024 © Silicon Saxony

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Editorial, Editorial, Funding, Growth, Growth, Internationalisierung, Internationalization, Promotion, Semiconductor, Silicon Saxony, Silicon Saxony

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Silicon Saxony

Marketing, Kommunikation und Öffentlichkeitsarbeit

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Telefon: +49 351 8925 886

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redaktion@silicon-saxony.de

Contact person:

Julia Nitzschner

julia.nitzschner@silicon-saxony.de

Telefon: +49 351 8973 3865

Robert Krauße

robert.krausse@silicon-saxony.de

Telefon: +49 351 8925 886

The international semiconductor market is growing at an increasingly rapid pace, as impressively underlined by Europe’s largest semiconductor trade fair, SEMICON Europa, which took place in Munich from November 14 to 17. Right from the start of the leading continental trade fair, its organizer, SEMI, juggled with impressive figures. From its beginnings in the 1960s to 2021, the semiconductor market has grown to 600 billion US dollars. By 2030, it is now expected to catapult to a quadrillion US dollars, according to current analyses by renowned consulting firms such as McKinsey and Co. In almost all user industries, from automotive to energy and medicine, the demand for microchips is increasing by a single to double-digit percentage. As a result, new semiconductor plants, known as fabs, are springing up all over the world. According to current estimates, 94 new fabs will come online globally between 2022 and 2026. In Asia alone, 63 new plants are being built (30 in China and 14 in Taiwan), 13 in Europe and 18 in America. The world is hungry for chips and everything they make possible. So it’s no wonder that Europe has also recognized the call of the hour and is communicating ambitious goals. By 2030, the European market share in the semiconductor sector is set to grow from its current level of less than 10 percent to 20 percent. In view of Asian investments and plans, however, this hardly seems realistic.

Billions invested in microelectronics and Saxony as a location

However, market share alone does not appear to be a meaningful achievement from the outset. In future, it will be much more important to be able to produce as much of what is needed in Europe as possible in Europe. After all, the coronavirus pandemic has underlined the global dependencies. Much of what was needed at the time was missing. Whether due to disrupted supply chains or insufficient in-house production capacities. “Technology sovereignty” has been the buzzword of the hour ever since. What followed were ambitious projects such as the “European Chips Act” or the “Important Project of Common European Interest” (IPCEI). Germany, in particular, tackled this self-imposed mammoth task with both ambition and billions of euros. 48 billion euros in total investment under the EU Chips Act and 4 billion euros under IPCEI were promised or already contractually assured. Microelectronics hotspots such as Silicon Saxony are currently experiencing a veritable investment and settlement rush. In Dresden alone, for example, the Bosch and GlobalFoundries plants are to be expanded. Infineon is building a new factory here in addition to its existing one. The Taiwan Semiconductor Manufacturing Company (TSMC), the global market leader among foundries, is relocating here as part of a cooperation project with Infineon, NXP and Bosch.

The Federal Constitutional Court makes a harsh ruling, but does not change the confidence of the industry

Outstanding news that has recently been widely publicized outside of the relevant trade media. News that also led to new records at SEMICON Europa in Munich. Sold-out exhibition halls and record visitor numbers underlined the current hype. 900 stands from 440 exhibitors attracted trade visitors. The industry was and is in a celebratory mood. After all, it is not only the major semiconductor manufacturers that benefit from the promotion and the current focus, but also the entire ecosystem – from service providers to suppliers. At an inopportune time, namely exactly on the second day of the trade fair, news came from Karlsruhe – more precisely from the hallowed halls of the Federal Constitutional Court. The Second Supplementary Budget Act 2021 is incompatible with Article 109 (3), Article 110 (2) and Article 115 (2) of the German Basic Law (GG) and is therefore null and void. As a result, in addition to important climate protection projects, the financing of industrial policy investment projects in the German semiconductor industry – as part of the EU Chips Act – which are to be made possible with funds from the so-called Climate and Transformation Fund (KTF), were suddenly on the brink. However, Federal Chancellor Olaf Scholz made a positive statement with regard to the three major German microelectronics projects in Saxony, Saxony-Anhalt and Saarland at the “Conference East Germany 2030”. “It is now up to the federal government to secure the announced funding this year if possible. This would give it the opportunity to demonstrate Germany’s much-vaunted speed, especially to international investors,” emphasized Frank Bösenberg, Managing Director of Silicon Saxony e. V., in this context.

Saxony’s Economics Minister Martin Dulig assumes that funding will be secured

How or whether the projects and funding amounts already promised will be realized is currently still purely formally in the stars. The fact that they will be realized is firmly believed at state level – whether in Saxony (e.g. for Infineon, TSMC) or Saxony-Anhalt (Intel). However, it is uncertain how the federal government intends to free up the missing funds. The budget to be passed in the next few days will show this. However, the fact that the money will flow was emphasized in Munich, for example by the state politicians present, above all Saxony’s Minister of Economic Affairs Martin Dulig. Dulig, among others, is certain that the funding has been promised and will not be called into question. The ruling from Karlsruhe is a stumbling block that definitely cannot stop a huge industry in its tracks. The semiconductor industry is currently setting its clear focus on the key topics of sustainability, integrated photonics and skilled workers. Others are responsible for solving the problem raised in Karlsruhe – namely the German government and its Chancellor Olaf Scholz.

The industry gathers the current and future industry leaders in Munich

With this in mind, the microelectronics industry showed composure and its current strength in Munich, even overshadowing productronica, which was taking place at the same time. The Silicon Saxony joint stand in particular became the focal point of a trade fair that presented innovations, discussed important topics and further fueled the drive of recent months and years. A total of 39 exhibitors presented themselves, their products and solutions at the Silicon Saxony joint stand. The press was there, as were numerous politicians and the managing directors of the leading microelectronics companies. Last but not least, the future leaders of the industry – the 20 under 30 – were selected at SEMICON Europa and the European Chips Skills Academy was launched. Silicon Saxony is proud to underline its leading position in Europe in this context as well. 15 of the 20 award-winning representatives come from the Silicon Saxony network – young, up-and-coming and bright minds such as Patrick Döll from Racyics, Christina Kaiser from GlobalFoundries and Laura Esposito from Applied Materials (all from Dresden). The three Dresdeners were honored in Munich, as were their 27 colleagues from companies such as Bosch, cadence, Siemens, X-FAB, GlobalFoundries, Edwards and Melexis. Last but not least, the current leaders of the microelectronics industry also gathered in Munich. Whether at the CEO Summit or the Fab Management Forum – the exchange within the microelectronics sector was promoted, as were contacts with the user industries – e.g. the automotive, medtech or smart manufacturing sectors. Silicon Saxony is also driving this networking forward and, together with clusters from France (Grenoble), Sweden (Lund) and Austria (Graz/Villach), took over the leadership of the European association of microelectronics clusters in the Silicon Europe network at SEMICON Europa. By 2025, Silicon Saxony will play a leading role in shaping the development of semiconductor manufacturing in Europe.

Silicon Saxony opens stand booking for 2024 and looks forward to returning to Munich

Silicon Saxony is already looking forward to SEMICON Europa 2024 and returning with an even larger and more spectacular stand than in 2023. The industry is growing and so is our joint network. Dozens of new companies also sought contact and the opportunity to join the Saxon high-tech cluster during this year’s trade fair. Take the opportunity to apply now for the Silicon Saxony joint stand 2024 or – if you have not already done so – to arrange membership of Silicon Saxony. We look forward to seeing you and to the exciting years ahead in what is probably the most dynamic and important industry of our time. See you again in Munich. We will be back in 2024 for SEMICON Europa and electronica, which will take place at the same time.

We would like to thank all exhibitors for their participation and a great time in Munich.

The exhibitors at the Silicon Saxony joint stand this year were: