Labour Shortage in Germany causes Havoc in Chip Manufacturing

Dresden, the former East German city, played a crucial role in chip development within the Eastern Bloc. Even today, its influence remains evident in Dresden and the surrounding region.

Currently, Saxony produces a significant portion of Europe’s semiconductors, with approximately one-third of the total output originating from this area.

Over the past few decades, Saxony has attracted substantial investments, resulting in the establishment of fabrication plants, also known as “fabs,” for prominent companies like Bosch, and GlobalFoundries.

There are also rumours suggesting that a future TSMC plant might be located in Saxony. Saxony currently employs over 76,000 individuals in the local chip industry, benefiting from the presence of nearby research institutes, semiconductor-related companies, and technical universities. It is projected by lobbyists that this number will reach 100,000 by 2030.

However, this workforce alone is deemed insufficient, not only for Germany but also for the entire European continent. The European Union aims to increase its semiconductor manufacturing share from 10% to 20% of the global output by 2030. Dresden’s initiatives to train and attract skilled workers may provide valuable insights into achieving this goal.

To address the skilled worker shortage, Germany has taken proactive measures. In October of the previous year, the government unveiled a comprehensive strategy that emphasizes education, upskilling, boosting labour participation, improving work culture, and reducing emigration. Additionally, Europe’s largest economy is undertaking reforms to its immigration laws, simplifying the process for skilled workers from abroad to migrate to Germany.