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Can SEMI revive Dresden manufacturing flare?

Posted: 11 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Dresden manufacturing market? semiconductor fair? chip industry?

When SEMI announced that it would relocate its Semicon Europa semiconductor equipment manufacturing fair from Suttgart to Dresden, it caused some surprise not because the fair will be held in Europe's most significant semiconductor manufacturing center. That makes sense and the move had been discussed and expected even when Semicon Europa was held in Munich. The surprise lies more in the fact that it came so late, or perhaps too late.

The industrial cluster that makes up Saxony's Silicon Valley is in crisis. The three semiconductor manufacturers which determine the image of the Dresden area as a focal point of the European chip industry are Advanced Micro Devices, Infineon Technologies and Qimonda. None of them currently makes money; all have announced severe job cuts and none of them seem to believe that controlling the means of production is the means to generate wealth. AMD is hurt by a price war with Intel; Infineon has shuffled off much of its manufacturing to Qimonda, which itself the victim of a seemingly endless price war in DRAM.

This trend, of course, also hits the ancillary industries such as mask making, process chemical supply and chip-related services. The competitive pressure from Asian companies on classic semiconductor manufacturing will persist and even increase, and it is a matter of time how long the three Dresden will be able to resist.

Hope in solar, polymer markets
But Dresden is also home to other electronics manufacturing operations and we should not think everything is gloomy. There are technologies such as photovoltaics and polymer electronics. These industries are either booming or in the pioneering phase that is the hunting ground for startup companies.

The German photovoltaic industry has its center of gravity in Saxony and accounts for 20 percent of the world's production.

Solar cells may not be as complicated or sophisticated as ICs, but the most complex chips, processors and memories are subject to the worst price erosion. The price-wars indicate that complicated is not valuable, while the price of oil shows that the relatively simple to make solar cell is valuable. There is no doubt that there are synergies between chip and PV industries, and the Dresden area certainly benefits from this fact.

Polymer electronics is also gearing up to complement the silicon chip industry with a focus on driving down the cost of simple circuits. Research institutes in the Dresden area, including several Fraunhofer institutes and the Chemnitz University along with several spin offs have created exactly the climate of innovation and entrepreneurship that is required to launch an industry. Currently, companies such as Plastic Logic and Novaled are either doing first steps in production or are preparing to enter the market.

While the effect on employment from these companies is still limited, its technological impetus is significant, and it is the best hope for keeping the Dresden cluster growing.

SEMI is certainly taking photovoltaics seriously, reflecting the attitude of its equipment-making membership, but Semicon Europa needs to respond to the requirements from all three disciplines, before it's too late.

- Christoph Hammerschmidt
EE Times

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