The Power of Tiny

Germany is strengthening its position as a leading global micro and nanoelectronics hub and partnering with other EU states to ensure Europe remains a viable player in this fast-growing sector.

December, 2017

With international competition heating up in the global semiconductor market – which represents a broad range of technologies fundamental to almost all industrial applications and plays a pivotal role in digitization, Industry 4.0 and the Internet of Things (IoT) – European industry and government leaders in Berlin and Brussels are taking decisive steps to secure, fortify and further develop the sector in the region.

In Germany, microelectronics are transforming the country’s traditional machinery and automobile manufacturing sectors, according to Christoph Kutter, director of the Fraunhofer Research Institution for Microsystems and Solid State Technologies in Munich. German industry is particularly strong in building machines and plants for production and automation. “Autonomous driving will be enabled by micro and nanoelectronics, sensors, data handling, control logic and security,” he points out. Indeed, electronics systems already represent some 90 per cent of automotive innovations.

Global investment

To ensure that Germany continues to play a leading role, the Federal Ministry for Economic Affairs and Energy (BMWi) last year announced a €1bn investment program aimed at promoting investment in the field from 2017 to 2020. The private sector has agreed to invest more than €3bn. The BMWi will contribute €850m to the project, with additional support from other EU member states.

»In Germany, microelectronics are transforming the country’s traditional machinery and automobile manufacturing sectors«

Christoph Kutter, Director Fraunhofer Research Institution for Microsystems and Solid State Technologies, Munich

The program was made possible by the European Commission’s aid regulations for Important Projects of Common European Interest (IPCEIs). Subsidies available to the microelectronics sector in Asia and the U.S. have helped to give them the edge, says Kutter. The IPCEI initiative will help level the playing field by spurring investment in semiconductor facilities in Europe and making Germany even more attractive to international players.

Indeed, 17 large and medium-sized semiconductor manufacturers, including international companies like Abu Dhabi-owned GlobalFoundries and Belgium’s X-Fab, as well as local players Infineon and Bosch (both world-leading semiconductor sensor and actuator manufacturers), are planning to invest more than €3bn combined in Germany. GlobalFoundries is investing €1bn in the expansion of its production facility in Dresden, while Bosch is spending €1bn for a new fabrication plant (fab) there and Infineon is planning major expansion to plants in Regensburg, Dresden and Warstein.

Key industrial applications for micro and nanoelectronics

GlobalFoundries is looking to increase production capacity at its Fab 1 facility in Dresden by 40 per cent by 2020 to meet demand for the IoT, smartphone processors and automotive electronics. The fab, which employs some 3,700 people, already represents one of the biggest international investments in Europe – to date a total of more than $9bn (€7.6bn). “The IPCEI on microelectronics will help to put the European network of industrial players, universities and R&D organizations back in the driver’s seat,” says Rath. “Our planned expansion of the Dresden site to a ‘one million wafer starts per year’ fab fits well into this development.”

For Brigitte Zypries, Germany’s Minister for Economic Affairs and Energy, the country’s microelectronics sector is vital. “Strengthening semiconductor expertise in Germany, and thus in Europe, is an investment in a key technology of the future, and thus a very important step toward preserving and enhancing competitiveness, also of Germany as an industrial location.”

Research at the recently-founded Research Fab Microelectronics Germany, where 13 German research institutes work together on mold-breaking new developments in micro and nanoelectronics.

© Fraunhofer IPMS

Research and innovation

It should be said that Germany is already home to more than 40 semiconductor fabs run by diverse local and international players, among them Dutch group NXP Semiconductors, US company Texas Instruments and Osram/Siemens. Earlier this year IBM opened a new global HQ for its Watson IoT business in Munich to accelerate innovation in the IoT via collaboration with partners.

IoT applications are of great strategic importance for semiconductor manufacturers. Bosch is building its new wafer fab in Dresden (a city that boasts a unique microelectronics cluster) in order to satisfy demand and expects to employ some 700 people at the new plant when it opens in 2021.

The Saxon city is developing a vibrant IoT ecosystem following its selection by the BMWi as a “Smart Systems Hub.” The government’s digital hub initiative aims to develop an internationally-recognized innovation center for industry-wide digitization.

The Federal Ministry of Education and Research is separately funding research in micro and nanoelectronics with €400m. The Research Fab Microelectronics Germany initiative, which launched in April, will help provide 13 participating non-university research facilities with state-of-the-art equipment and systems. In a second step, €50m will be earmarked for universities doing research in the field.

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