Saxony, Germany, a leading European semiconductor hub, is deepening its ties with Taiwan, as TSMC expands its European footprint. This strategic partnership, fueled by over EUR50 billion in industry investments, aims to position Saxony as a global semiconductor powerhouse, centered in Dresden’s “Silicon Saxony.”
Beyond chips, the collaboration extends to electric vehicles (EVs), robotics, and hydrogen energy, solidifying Europe’s technological leadership. Saxony, home to over 3,650 companies and 76,000 employees in the microelectronics and ICT sectors, produces one-third of Europe’s chips, boasting the continent’s largest microelectronics cluster and the fifth largest globally.
TSMC’s entry strengthens Saxony’s position as a key player in the global semiconductor industry, attracting further investment from industry leaders like Intel, Infineon, Bosch, and GlobalFoundries. Within a 300km radius of Silicon Saxony, over EUR50 billion is planned for the semiconductor industry.
The region’s unique strengths lie in its ability to combine hardware, software, and connectivity technologies, creating a complete value chain from R&D to production, supported by top-tier universities and a semiconductor-savvy regulatory environment. Silicon Saxony, with its numerous fabs and major suppliers, mirrors the success of Taiwan’s famed Hsinchu Science Park.
Saxony faces challenges in scaling its semiconductor industry, primarily in securing skilled personnel. To address this, the government is fostering collaboration between universities and companies like TSMC, facilitating student exchanges and internships.
The integration of different work cultures is another potential hurdle, with Germany’s strong labor union tradition differing from practices in some Asian countries. However, this is seen as an opportunity to leverage the close cooperation between companies and labor unions, a key contributor to German economic success.
Saxony’s role as a growing hub for EV production complements its semiconductor industry. The region’s focus on battery production and hydrogen energy strengthens its leadership in the green transition, offering additional opportunities for Taiwanese-German collaboration.
The semiconductor push is part of a broader strategy to diversify Saxony’s economy, positioning it as a center for innovation in emerging technologies such as organic and flexible electronics, 5G/6G communications, MEMS, sensors, automation, and AI.
Saxony’s semiconductor surge, aligned with the European Chips Act, is poised to bolster the EU’s competitiveness in the semiconductor market. As these multibillion-euro projects move from planning to production, the global semiconductor industry will be watching closely to see if Saxony’s bold investments can reshape the European tech landscape and secure a larger share of the global market.
