Saxony is taking on a pioneering role in the European semiconductor industry with the imminent establishment of TSMC. We spoke to Thomas Horn, Managing Director of Wirtschaftsförderung Sachsen GmbH (WFS), about the significance of this decision, the role of state funding and the resulting opportunities for the region. He provides insights into Saxony's economic strategy, support for innovative start-ups and the future of e-mobility in the Free State. This interview sheds light on Saxony's ambitious goals to position itself as a dynamic and future-oriented business location.
Semiconductor industry and state funding
How do you assess the impact of TSMC's planned relocation to Dresden on the local and European semiconductor industry?
The decision by the world's largest chip manufacturer TSMC to locate in Saxony is a quantum leap for our business and science location. Saxony is thus consolidating its position as the largest European microelectronics cluster and establishing itself as a leading global semiconductor location. Our particularly innovative ecosystem was particularly convincing in international competition. We have a broad mix of industries here, great potential in cross-industry cooperation and successful exchange with a broad-based research and development landscape and established industry networks. In addition, there is great dynamism in technology and future topics.
In light of the discussions surrounding the TSMC settlement, how do you think it could be ensured that such projects offer sustainable benefits for the community?
Government investment makes a significant contribution to making Germany and Europe more independent in a key technology. The funding associated with the investment particularly supports the start-up phase of entrepreneurial decisions and helps to achieve set goals more quickly.
We expect the TSMC investment to provide significant impetus for the establishment of other companies that offer services and technologies related to chip production. However, many companies from Saxony that are already part of the value chain and user industries will also benefit - from large companies to SMEs.
Start-ups and innovation
In addition to major investments such as TSMC or Globalfoundries, what lesser-known but successful start-up initiatives are there in Saxony?
Saxony is well positioned to support start-ups. There is a wide range of different funding instruments for founders, for the transfer of innovations to companies and also for cooperation between established companies and young start-ups. Our subsidiary, futureSAX GmbH, plays a key role as a "caretaker" on the government side to actively support young innovative companies. In addition, there are other players that are often closely linked to Saxony's universities, such as the Hightech Startbahn Netzwerk, Dresden exists - the start-up service of Dresden's universities and research institutions, SAXEED - the start-up network of south-west Saxony and SMILE - the start-up initiative at Leipzig University.
What measures does the WFS take to support start-ups?
We ourselves also help start-ups to establish international contacts. To this end, WFS has once again organized trade fair participations specifically tailored to start-ups this year. These included the Web Summit in Lisbon and SLUSH in Helsinki. There, companies presented their innovative business ideas to interested investors. This year, the "STEP USA" program, which the WFS ran together with the German Chamber of Commerce Abroad, offered another opportunity specifically for entering the American market and attracting investors. Saxon start-ups were able to present their business model to potential investors in New York City, which is considered one of the most important places in the world for young entrepreneurs and start-ups, as part of a so-called pitch night.
E-mobility and the automotive industry
Just like Tesla with its plant in Grünheide, Chinese car manufacturers are also planning to build production capacities in Germany. How do you assess this development with regard to Saxony's automotive industry?
With the automotive industry, our main export product is undoubtedly under increased pressure to transform, but the sector has coped very well with this so far. Saxony has developed into one of the top European regions for the production of battery-electric cars.
The industry is very well networked and benefits from the excellent research and development centers for production technologies in Saxony. Thanks to its high level of microelectronics and software expertise, Saxony is well positioned in another important future field of the automotive industry and has great opportunities in international comparison, especially in the field of automated driving.
What challenges and opportunities do you see for Saxony as a location for e-mobility in an international comparison?
With regard to new production locations, developments to date have always shown that investments by international companies have led to economic progress for the respective target market and that regional supplier structures and thus economic added value have been created locally. However, it is also the nature of a market economy that the best product with the best price/performance ratio will ultimately prevail in the competition for customers. This competition is open and the opportunities for German vehicle manufacturers also look good in the long term.
Economic development and future projects
How do you rate the successes of Saxony's economic development to date and what lessons can you draw from them for future projects?What are Saxony's long-term goals in terms of economic development and how does the state plan to achieve them?
The WFS sees itself as a door opener, bridge builder and networker for companies, investors and the business location as a whole. In this role, we have supported and assisted numerous investors in successfully settling here over the past 30 years. Each settlement is a success in itself and important for the location. However, we do not live on an island and must also accept that in the global competition for investors, business decisions that take many factors into account can also be made in favor of other locations. However, we are happy to face up to this competition and have repeatedly found that we can score points in the domestic, European and global competition between locations. The most recent investment decision by TSMC mentioned above underlines this very impressively.
Another important task is to support Saxon companies in opening up international markets. The focus here is on participation in international trade fairs and the organization of business and delegation trips. These are important instruments, especially for small and medium-sized companies, for exploring foreign markets and examining opportunities for cooperation. And this is also very relevant from an economic perspective, as Saxony is an export country. In 2022, goods worth more than €52 billion were exported. This means that Saxon companies earn more than one in three euros abroad. It is also important to have a variety of trading partners in order to avoid one-sided dependencies. And if you see that the five largest export markets are China, the Czech Republic, the USA, Poland and the UK, then this is working quite well. However, we are also constantly looking at new markets in order to open doors for Saxon companies, for example in India, Africa or Central Asia.
On the other hand, we support companies in reacting to changes in global markets by recognizing relevant technology and market trends at an early stage and further developing the strategic focus on core industries and future technologies. In doing so, we focus on expanding cross-industry and cross-technology cooperation between the key core industries, i.e. the automotive and supplier industry, microelectronics, mechanical and plant engineering, energy and environmental technology and the life sciences sector, and bring their players together in special project workshops, among other things. In addition, the further development of future-relevant high and cross-sectional technologies such as lightweight construction, sensor technology, robotics, AI and hydrogen technology plays a major role for the Saxon economy because we are particularly innovative in this area. This in turn gives us the necessary edge in global competition.
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➡️ Contact: Thomas Wolf, thomas.wolf@diesachsen.com
