Thomas Alsop
Research expert covering the global hardware industry
Silicon Saxony - statistics & facts
The beating heart of Europe's microelectronics industry, and one of Germany's largest IT, high-tech, and artificial intelligence clusters, can be found in the state of Saxony. Silicon Saxony is the registered industry association for over 550 member companies operating in these sectors. Approximately one-third of all chips in Europe originate from this region, making the Dresden area an important hub for the European semiconductor industry. And, with the semiconductor giant TSMC announcing plans to open a production facility in the region, Silicon Saxony is set to remain an important part of Germany’s high-tech sector.
Silicon Saxony as an economic driver
Collaboration among German, European, and international semiconductor and related tech companies provides employment for more than 20,000 people in Saxony and brings in over four billion euros in turnover to the area. Playing a part in the German economy, the nation’s semiconductor industry is vital to the success of numerous industries. A stable supply of chips, particularly those designed for automotive and industrial applications where Germany excels, is essential for maintaining Germany’s economic momentum.Government backing a bonus
Recognizing the importance of a strong and robust semiconductor industry, the German government has committed to spending 20 billion euros to secure the industry’s future by enhancing production in the country. This announcement came hot after the European Chips Act, a joint effort to safeguard Europe’s supply of chips through 43 billion euros of investment. As such, companies located in the Saxony region are well positioned to secure any investment to expand their own manufacturing capacity, with this also serving as a valuable tool for attracting new investment projects to the region.Taiwanese chip giant to build a plant in Saxony
Another positive development for the region is the announcement by the world’s largest foundry, TSMC, to build a semiconductor fabrication plant in Dresden in partnership with Infineon, Bosch, and NXP Semiconductors. The project sees TSMC set up a European subsidiary, European Semiconductor Manufacturing Company (ESMC), with TSMC owning 70 percent of ESMC and the other firms each controlling a 10 percent stake. With construction of the facility in Dresden starting in late 2024, production is expected to begin by the end of 2027.The bright future for Germany’s Silicon Valley
Such a deal serves as a prime example for governments and regions aiming to meet future semiconductor capacity needs. In the case of much of Europe, including Saxony, most of this demand is expected to be picked up by the growing automotive and industrial sectors. As a result, investments in Europe, and more specifically Saxony, that once seemed unlikely, could become a reality, and serve as a real boost to the German economy.
