US Investors Expand Semiconductor Operations in Dresden

Globalfoundries, a prominent semiconductor manufacturer, has announced plans to significantly expand its production facility in Dresden, Germany. The company aims to double its output to reach up to 1.5 million wafers annually. This expansion is particularly noteworthy as Globalfoundries serves as a crucial supplier for the automotive industry.

A spokesperson for the company confirmed that they have commenced work on their European Chips Act project in Dresden, following an early start approval from the Federal Ministry of Economics. Specific details about the project are expected to be released in the coming weeks. While the ministry has not provided additional comments, Oliver Schenk, a Member of the European Parliament, indicated that the government granted permission for the project to begin last Friday. The formal approval for funding is still pending, but the company is now in a position to begin purchasing necessary equipment.

Globalfoundries applied for a new government funding program aimed at supporting innovative investment projects in the microelectronics sector late last year. Approximately 25 projects are set to receive funding, although a final decision on these initiatives has yet to be disclosed. The most expensive project is anticipated to come from the Dresden-based company FMC, which specializes in the production of advanced memory chips, with a subsidy amounting to 1.3 billion euros.

Interestingly, Globalfoundries' investment marks a significant development as it represents a US corporation investing in Germany amidst the backdrop of Intel's recent withdrawal from a proposed site in Magdeburg. Dresden continues to strengthen its reputation as a leading semiconductor hub, often referred to as "Silicon Saxony." The region is home to several major semiconductor manufacturers, including Infineon, NXP, Bosch Semiconductor, and soon TSMC, which has been allocated five billion euros in subsidies for its first European factory.

This financial support could also be advantageous for Globalfoundries, which estimates that between 20 to 50 percent of its investment for the site expansion will be covered by tax revenue. In light of recent less favorable news from the automotive and chemical sectors, this expansion brings renewed hope for economic growth in Saxony. Schenk noted that Saxony's well-established semiconductor ecosystem has once again proven competitive in the global landscape.

He referred to the new investment as a significant milestone for the high-tech sector in Europe. The expansion is expected to reduce reliance on suppliers outside of Europe and secure highly skilled jobs in the region. Globalfoundries currently employs about 3,200 individuals at its Dresden facility, which is recognized as Europe's largest semiconductor factory.

In addition to its expansion in Germany, Globalfoundries is advancing operations in the United States, recently announcing a $16 billion investment for the enhancement of its facilities in New York and Vermont, focusing primarily on semiconductor production for artificial intelligence-enabled devices. The company supplies major technology firms, including Apple and SpaceX.