- Germany serves as a significant worldwide provider of semiconductors.
Semiconductors are the lifeblood of modern societies, sparking national interests in establishing chip manufacturing facilities. Contrary to popular belief, Germany holds a surprisingly strong position in this global market. As a major player in semiconductor production, Germany ranks among the top nine nations worldwide in this crucial industry. The country excels in niche sectors like power semiconductors, optical chips, and sensor technology, according to a study by the Ifo Institute and EconPol Europe.
When it comes to global exports, China and Taiwan dominate the scene, particularly in integrated circuits. These electronic components combine various elements, such as transistors and capacitors, on a minuscule semiconductor chip. This includes microprocessors, the main chips in devices like smartphones and computers.
While Asia leads in chip production, Europe and the United States contribute significantly to the global semiconductor industry. Germany, along with the USA and Japan, excels in specialized semiconductor components that control and switch high electrical currents and voltages. These countries are equally proficient in optical chips used in fiber optic networks.
If we consider the whole production chain, including machinery and raw materials, instead of just finished chips, the export-import balance tilts in Germany's favor. According to Lisandra Flach, head of the Ifo Center for International Economics, dependencies in global semiconductor production are not one-sided but mutual.
As the strategic importance of the semiconductor industry rises, nations are racing to establish new chip plants. Germany saw significant interest with Intel planning a factory in Magdeburg, with an estimated €30 billion investment and €10 billion in subsidies from the federal government. However, in September 2024, Intel postponed the project by two years and announced a global cost-cutting wave, casting doubt on the plant's future.
In the global semiconductor market, key players span a range of countries, each excelling in specific areas. Taiwan, led by Taiwan Semiconductor Manufacturing Company (TSMC), dominates the foundry market. China, although a leading producer, contributes to the foundry market through Semiconductor Manufacturing International Corporation (SMIC). South Korea, with Samsung, holds a significant share in the foundry market, and Japan and the USA also make notable contributions.
Countries like Germany and the Netherlands fit into this picture, bringing their unique strengths to the global semiconductor industry. The interconnectedness of this industry ensures that no single nation holds an absolute advantage, and mutual dependencies prevail.
The Japanese exporters, with their expertise in semiconductors, play a vital role in controlling and switching high electrical currents and voltages, making them crucial contributors to the global semiconductor industry. In 2024, the strategic importance of this industry is further highlighted as Intel considers a €30 billion investment in a factory in Magdeburg, Germany, showcasing the country's importance in the global semiconductor market.
