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Silicon Saxony

Silicon Valley for the Twenty-First Century and Beyond

Even if you are Dresden for a high-tech trade show, like the DATE conference, you cannot avoid the layers of history. For a long time, it was the capital of different incarnations of an independent State of Saxony, in later times sharing a King with Poland. It became part of the German Empire when it united multiple German speaking states in 1871. By the turn of the twentieth century, it had strong centres of industry, including the historic porcelain manufactory at Meissen and textiles at Chemnitz, and the area produced the beer mat, the coffee filter, and the bra.

In 1945, at the end of the Second World War, it fell into the Russian zone of occupation, which then became the Russian satellite, the German Democratic Republic (DDR). It was 45 years later that Germany reunified, and Saxony, as a part of that reunification, joined the Federal Republic of Germany as the Free State of Saxony in 1990.

Dresden still carries the scars of the Second World War when, in a heatedly debated act, a great deal of the historic Baroque centre was destroyed by a series of bombing raids in February 1945. Under the DDR, some of the historic buildings were restored, but the residential areas were mainly replaced with huge concrete apartment blocks. Since unification, there has been considerable work on restoring the historic buildings and even work on improving the look of some of the DDR buildings.

Silicon arrived in Dresden in 1961, when the DDR established the Zentrum Mikroelektronik Dresden as the driver for their work in semiconductors. In the fluid period immediately after the fall of the DDR, it was the source of a number of spin-offs, some of which still survive, and it was acquired by IDT in 2015.

The next milestone was the decision by Siemens to establish “Siemens Microelectronics Center Dresden” in April 1994, specialising in DRAM and today the core of a large Infineon facility, running 200 and 300 mm wafers for a range of end applications, including automotive, power, and chip/card security.

Two years later, AMD broke ground for a microprocessor fab in Dresden, later adding a design centre. This was in the days when, as AMD’s founder Jerry Sanders said, “Real men have fabs”. AMD continued to expand on the site, but in 2009, it decided to spin off its manufacturing into a company (GlobalFoundries) with investment from the Advanced Technology Investment Company and Mubadala Development Company of Abu Dhabi. Later in that year, ATIC bought Chartered Semiconductor, a Singapore based company, and merged it with GlobalFoundries. In 2014, it took over IBM’s chip manufacturing with a dowry from IBM. Today, it now has fabs at a range of technology nodes in Singapore, New York, and Vermont, and it has a plant under construction at Chengdu, China. The Dresden site has several modules and is working at 28, 22 and 12 nm, with a special interest in FD-SOI.

For the City of Dresden and the State of Saxony in the post-reunification era, these developments, which were attracting supporting companies, offered a route to build a new industrial base, and they seized the opportunity, providing support in many ways. Some has been financial, from the City of Dresden, the State of Saxony, and the national government, although this has to be carefully managed to meet the European Union requirements. But there are less tangible things local governments can do, such as creating a positive approach to supporting companies and easing the inevitable bureaucracy for new buildings, even working to make public transport meet the needs of companies (Infineon has its own tram stops.)

And this has led to Silicon Saxony. This is, in some ways, a geographical concept – like Silicon Valley but with a lot more silicon (half of all chips made in Europe are made in Saxony) and a lot fewer companies calling themselves technology companies but that are really advertising agencies or taxi firms. Silicon Saxony is one of the leading electronics clusters in Europe. Two others are around IMEC in Leuven, Belgium and CEA-Leti in Grenoble, France.

Silicon Saxony is also the name of the industry association, which has over 300 members, including, in addition to commercial enterprises, research institutes, universities, and colleges. While the majority of members are based in north Dresden, others are in Chemnitz, Leipzig, and other locations.

The region has a strong base of technological universities, such as the Technical University, Dresden, and these have multiple research units in the Silicon Saxony network alongside several Fraunhofer Institutes. (Fraunhofer Institutes are German research centres funded from industrial research contracts, from the local State and from the national government.) The Fraunhofer Institute for Photonic Microsystems, with two sites in Dresden, is a key part of Silicon Saxony, with expertise in optical sensors and actuators, integrated circuits, microsystems (MEMS/MOEMS), and nanoelectronics.

While the manufacturing plants, Global Foundries, Infineon, X-scale, and others are the “silicon” foundation of Silicon Saxony, the directory of members shows a very broad range of core competencies, including mask making, equipment manufacture, design services, software, embedded systems, and a raft of supporting services. There are also some rather more esoteric technologies, such as the e-paper company Plastic Logic, originally a Cambridge University spin-out and now producing flexible plastic displays to replace glass-based screens in Dresden.

The presence of the resources is given as a reason why the area continues to attract investment. Bosch, for example, is investing a billion euros (US $1.2 billion) into a 300 mm wafer fab for MEMS sensors, which will be in production by the end of 2021.

Within the network are multiple divisions (Micro and Nanoelectronics, Software, Applications, Smart Systems, Energy Systems, and Cross-sectional Topics) where members come together to identify trends, share experience, and look for areas of cooperation. Each division has multiple work groups addressing different work topics. For example, Smart Systems has a “Smart Integrated Systems” work group, which, in addition to covering technical subjects, also has an active marketing activity with a “Microcompetence in Saxony” tag line and presence at trade shows, organising conferences and seminars, briefing the investment community, and helping to set up businesses.

These multiple groupings also foster the kind of cross-company cooperation that will allow organisations to evolve to meet the changing challenges of evolving technologies.

In addition to continuing to attract investment from existing entities, the State, the cities, and the network all stress the importance of start-ups, including spin-offs from the universities, and they cooperate on activities to help them. One interesting project is the Volkswagen Future Electromobility Incubator. Some years ago, VW built a manufacturing plant in Dresden – “Die Gläserne Manufaktur” – the glass, or transparent factor. Initially, they built the Phaeton limousine. When this was discontinued, the factory was refitted to build electric vehicles, currently the e-Golf, with other models coming on line soon.  (The whole building has impressive environment credentials, to the point that many of the components are delivered by the CarGo tram (light rail). It also has a good restaurant.) Within the factory, VW is creating an incubator for new start-ups working on aspects of electromobility. The intention is that the start-ups will learn from VW and each other and also feed into VW’s longer-term plans.

With all this growth, where are the people coming from? The universities are producing a steady flow of graduates, but the region also has to attract people from elsewhere. Most of the bigger companies already have a strong international mix. And the city is working to help them. The city people point to Dresden as an attractive place for young people to live and, in time, to bring up a family. House prices are very much lower than, for example, those of Munich or Berlin, and there is a strong social scene. For families, the city has lots of parks and is investing in its child care, particularly in new kindergartens, and the main school system.

One issue for living in Dresden is communications. The airport is small, and to get there from any distance often requires a change. The city it is at the end of a limb of the ICE high-speed railway service – the one train an hour that is routed through Leipzig has to share the line (the oldest long-distance line in Germany, dating from 1839) with a stopping passenger service and freight trains, and it is limited to under 100 kph. (On purpose-built high-speed lines, the speed limit is 300 kph or 186 mph.) However, the energy that has gone into creating Silicon Saxony will be addressing this problem, so look for changes and improvements.

Despite the communication difficulties, the city is building a strong presence in the technical conferences and trade shows, with no less than ten international events in 2018 alone.

In the 1970s and 1980s, countries around the world tried to recreate what they saw as the success of Silicon Valley, but they didn’t understand the social dynamics that drove it at that time. Today, any country looking to encourage technology should look very closely at Silicon Saxony for inspiration.

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