THE Image Zeitung, a popular tabloid with little reputation for its articles on economic analysis, found the right formula: “Chip chip, hurray! “He headlined on the front page Wednesday, August 9, to welcome the decision of the Taiwanese manufacturer of semiconductors TSMC to install its first European factory in Dresden, in eastern Germany.
A limited liability company called “European Semiconductor Manufacturing Company” (ESMC) was created as a joint venture with three Europeans in the sector: NXP Semiconductors (Netherlands), Infineon and Bosch (both German). They will each own 10% while the Asian parent company assumes 70%. In total, it is an investment of 10 billion euros with 2,000 ultra-qualified jobs at stake.
Saxony thus confirms its status as an industrial region with high added value. According to official figures communicated by the Land, an electronic chip (“chips” in English) out of three produced in Europe already comes from this “Silicon Saxony”. 70,000 jobs depend on the center of excellence. In Dresden, the factory of the American Globalfoundries, with 60,000 square meters, is the largest in Europe. ESMC will occupy ten times the area north of the city. Construction will begin in the fall of 2024. Start of production planned for 2027.
Highly subsidized investments
At the same time, the Bavarian Infineon has also chosen the Saxon metropolis for its future “smart powerfab”. Work was launched in May in the presence of the German Chancellor, Olaf Scholz, and the President of the European Commission, Ursula von der Leyen.
Politics comes first because these spectacular private investments are heavily subsidized. The German Federal State supports the Infineon project with 1 billion euros and will put up to 5 billion in the European joint venture of TSMC. The same goes for the largest foreign direct investment ever made in Germany: 9.9 billion German public money out of the 30 billion euros for the future Intel factory in Magdeburg, also in eastern Germany.
“Another flagship project of this type in the east of the country, and the federal state will be naked”quipped Tuesday the editorialist of the Spiegel, Nikolaus Blome, in a tweet. In Germany, we don’t have the culture of industrial policy. We are even wary of what some call “transfers of funds from taxpayers to shareholders”. The State therefore traditionally stands aside from the major choices made by companies.
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