For Infineon it is the largest single investment in the company’s history, for the EU it should be the beginning of a catch-up race – and even for Federal Chancellor Olaf Scholz (SPD) it was an opportunity for groundbreaking words. At least as far as possible. The ground-breaking ceremony for the new Infineon chip factory in Dresden is a milestone for the German semiconductor industry and the crowd that was organized for it on Tuesday was correspondingly large. In addition to the Chancellor, EU Commission President Ursula von der Leyen had traveled from Brussels. She said: “We need more such projects in Europe because the need for microchips is increasing rapidly.”
Infineon is investing five billion euros in the construction, it is the fourth and largest factory that the Munich tech company is building in Dresden. Infineon wants one billion euros in funding for this, as announced by CEO Jochen Hanebeck in February. This is made possible by the “European Chips Act”, with which Europe wants to make itself more independent of Asia and the USA. The EU wants to double the production of semiconductors in Europe within 20 years. Hanebeck said on Tuesday: “We are setting the pace for the green and digital transformation.” The global demand for semiconductors will grow strongly and continuously in view of the high demand for renewable energies, data centers and electromobility.
This is what the new factory should look like, with the dark roof in the foreground.
(Photo: JENS SCHLUETER/AFP)
In order to strengthen the competitiveness of the European chip industry compared to the USA and Asia and to help with the settlement of new semiconductor factories, the EU has launched a package worth 43 billion euros. Von der Leyen said on Tuesday that more mass production of semiconductors is needed in Europe. The production of chips is an indispensable component for the green and sustainable future: “Dresden is without a doubt a digital lighthouse in Europe.”
Dizzying amounts are not only being invested in Saxony. Intel wants to build a semiconductor factory in Magdeburg for 17 billion euros, and the US company Wolfspeed has just decided to build a chip factory in Saarland for three billion euros. And Taiwan’s largest chip company TSMC is also said to be interested in Dresden.
components for the energy transition
Chips are the basis of all essential transformation technologies – from the wind farm to the charging station, said Scholz, before he placed a silver Infineon spade on a stage podium in a specially tent erected for this purpose. The transformation to a climate-neutral economy is the central task of the coming years, said Scholz. “We need semiconductors, lots of semiconductors, semiconductors and more semiconductors.”
From 2026, chips that drive electric cars, make data centers more efficient and improve the generation of renewable energies are to be manufactured in Dresden in the “Smart Power Fab”, as Infineon is nicknamed the new plant. 1000 new jobs are to be created, Dresden is to be strengthened as the most important European semiconductor location in the long term. “Infineon’s investment strengthens Europe, Germany,” said Kretschmer, “Europe is back in the competition for the future.”
There are already around 73,500 well-paid jobs in “Silicon Saxony”.
In “Silicon Saxony”, a cluster of microelectronics manufacturers in the north of Dresden, Infineon is just one player – a total of 2,500 companies have settled there, including names such as Globalfoundries and Bosch. The supplier group also announced billions in investments in the semiconductor business last year, with new development centers to be built in Reutlingen and Dresden. According to the industry network Silicon Saxony, the Dresden area is the largest European location for microelectronics and information and communication technology. 73,500 well-paid employees work in the industry in the greater Dresden area, and by 2030 it is expected to be 100,000.
Employees of the chip company Infineon in the clean room of the chip factory.
(Photo: Robert Michael/dpa)
Infineon and Dresden is a “very special success story,” said Scholz. Saxony is the prime example of reindustrialization, every third chip produced in Europe is manufactured here: “Look here at Dresden, Germany’s future is being created here.”
In February, the Federal Ministry of Economics granted approval for an early start to the project. This allowed work to begin before the EU Commission decides on the state aid assessment. When the plans were announced, Infineon CEO Hanebeck pointed out the growing demand for semiconductors: “Together we are speeding up the expansion of our production in order to benefit from the growth opportunities that the megatrends of decarbonization and digitization are opening up for us.” With this, Hanebeck was also alluding to the difficult situation in the corona pandemic, when supply chains were interrupted and assembly lines also came to a standstill in Germany. However, there is also clear criticism of the state funding. The President of the Leibniz Institute for Economic Research in Halle, Reint Gropp, recently had in an interview with the SZ criticizes that the state is throwing money out the window.