“It’s like gold and spices used to be: the raw material for this generation is semiconductors,” says technology journalist Michael Josh to TV4 Nyheterna.
The German government has invested around SEK 60 billion in subsidies to attract the Taiwanese company TSMC to Dresden, where they will build the factory in an industrial area on the outskirts of the city.
A few miles away, the American Intel is also to build a factory, also supported with enormous government support.
Sanctions, spies and war
There are many different types of semiconductors: from the most rudimentary – used in washing machines or refrigerators, for example – to the most advanced used in mobile phones, high-performance computers or weapon systems.
When it comes to the cutting edge of technology, the United States is the world leader. But there is a constant battle with China trying to catch up. In several cases, suspected industrial spies have been arrested, suspected of having sold semiconductor technology to China.
The latest move by the US is to introduce export controls to prevent the most advanced semiconductor technology from falling into Chinese hands.
But when it comes to the actual production of all the millions of semiconductors, most of the factories are in Asia – above all in South Korea, China and Taiwan.
– Around 70 percent of all semiconductors are shipped through the Taiwan Strait, says semiconductor expert Antonia Hmaidi from the think tank MERICS to TV4.
Then world production stops
If China started a blockade there, the world’s production of everything from cars to mobile phones would quickly stop.
It is against this background that Germany and several other countries within the EU are ready to invest huge sums to attract semiconductor producers to Europe.
The two factories being built in central Germany will not be enough to supply all European companies with semiconductors if imports collapse.
Antonia Hmaidi believes that once they are up to full production, maybe Europe could get by for a few days with self-produced semiconductors. Despite all the existing factories that exist, many in the Netherlands, and that the factory outside Dresden will be one of the largest in the world.
But it is a first step, and it keeps Europe relevant. If you have your own production of semiconductors, you have a seat at the negotiating table in the event of a crisis.
– Europe can continue to be a player, so when we talk about semiconductors, Europe will be part of the discussion, says Antonia Hmaidi.