TAIPEI (Taiwan News) — The German state of Saxony aims to leverage its position as a leading semiconductor cluster to become a “Taiwan hub” in Europe, CEO of Saxony Trade and Invest Corp. Thomas Horn said, shortly before the Taiwan Semiconductor Manufacturing Co. (TSMC) groundbreaking ceremony for its new plant in the state.

In a written interview with Taiwan News, Horn said the TSMC groundbreaking will be a significant milestone for the project. He said that his office, the state, and suppliers are working hard with the Taiwan semiconductor giant to make sure everything goes to plan.

With the entry of TSMC into Saxony, the state is also seeking to attract suppliers to the chip industry to the region. “In addition to TSMC’s investment, Infineon, Bosch, and X-Fab are also expanding their facilities in Dresden, while GlobalFoundries announced that they will double their capacities,” Horn said.

“This is a huge opportunity for suppliers of any kind, from materials and machinery to software and services,” he said. “Our doors are wide open to everyone, be they from Germany, Europe, the US, or Asia, including Taiwanese businesses, of course.”

Horn described a Taiwan business delegation who visited Saxony in mid-June, and said the visit opened the door to further cooperation. “We would be very happy if numerous companies from Taiwan decided to establish their new European branches here as a result, especially in the microelectronics sector," he said.

He added there are opportunities for companies in other high-tech industries to establish operations in Saxony, including in robotics, sensor technologies, biotechnology, software, and others. “The chances for that have never been better than now, in the context of the establishment of TSMC,” Horn noted.

He said one of Saxony’s current priorities is to adapt the ecosystem to new requirements, while expanding it with new international and regional suppliers and service providers. “This goal is backed up by corresponding political decisions in the Free State of Saxony, which provides the framework and expansion of technical and social infrastructure that are necessary to support the strategic development of 'Silicon Saxony.’”

Training is also a focus area for Saxony. The first group of students from the Technical University Dresden (TUD) arrived at National Taiwan University (NTU) in March for the Semiconductor Talent Incubation Program Taiwan, which Horn said was the first bilateral program of its kind.

He said the program was “tailor made” to support the establishment of TSMC in Saxony, and that the number of applicants for the program far exceeded the available places. Horn mentioned the program will not only help develop the needed professional expertise, but also strengthen the Saxony-Taiwan relationship at a personal level.

The establishment of a new microelectronics academy in Saxony is also under consideration, according to Horn. He also noted that the upcoming German Research Center for the Transformation of Chemistry (CTC) will support the microelectronics industry and its future needs.

“The exceptional Saxon ecosystem offers a diverse mix of industries and great potential in terms of interdisciplinary collaboration,” Horn said. “It also offers opportunities for fruitful exchanges among a diversified research and development environment, and its integration in internationally established industry networks is strong.” 

Saxony’s advantage as a technology cluster is also due to its long history in microelectronics, Horn added. This began long before German reunification in the 1970s and 80s, when Saxony became the first region in Europe with a “complete value chain” for silicon wafers and microchip production.

He noted that the companies Siemens and AMD, which became Infineon and GlobalFoundries established chip factories in Saxony in the 1990s and were later followed by X-Fab and Bosch. “The investment decision of TSMC brings the next big growth spurt,” according to Horn.

He also said small and medium-sized enterprises (SMEs) are of “enormous importance” to Germany’s national economy, and business support in Germany and Saxony is focused on this area. Using the German word for SMEs, Horn said “mittelstand” is one of the secrets behind Germany’s economic success, and relationships between small and large companies are needed for both to succeed.

“Without supplies, machinery, facilities, and services provided by SMEs, Airbus would not be able to build planes, BMW could not build cars, and TSMC could not manufacture chips,” he stated.

“People from almost every country in the world live and work in Saxony - a business location with international connections. In the microelectronics industry in particular, international teams in companies have long since been the norm,” he said. “We are therefore very certain that new companies from Taiwan will bring their own employees with them.”

In terms of social infrastructure, Horn described a range of measures that are being put in place or considered to support Taiwan staff who move to Saxony to work. He noted Germany’s new Skilled Workers Immigration Act, which has relaxed immigration thresholds, and the experience of the German Institute in Taipei to assist employees of Taiwan companies, alongside the “Welcome Centers” in Saxony that have been established to welcome international professionals.

Saxony is also considering how to implement Mandarin language school lessons for children of the Taiwanese workforce, such as at the Dresden International School, Horn said. He added that even today, there are already Asian supermarkets, the first Taiwanese restaurant, and other sports and cultural activities he believed would suit Taiwanese well. 

“In short, we are very much looking forward to welcoming new citizens from Taiwan,” Horn said.

Saxon officials have previously expressed confidence that labor issues and working culture differences between Taiwanese and German staff would not impact the development of Taiwan microelectronics businesses in the state. Horn reaffirmed this and said that cultural differences are natural, and a challenge that will be resolved in the best possible way for all parties.

“So far, we managed to do that quite well,” he said. “The groundbreaking for the construction of the new TSMC factory just one year after the investment decision is proof of that.”