In its search for sorely needed talent, German chipmaker Infineon Technologies AG is looking as far as Guatemala, but the rise of the far-right at home risks making the move unappealing and harming the industry.
The semiconductor group has plans for a new 5 billion euro (US$5.4 billion) factory in eastern Germany — and it is not alone.
Backed by huge government subsidies, US chipmaker Intel Corp is planning to build a plant in Magdeburg, while Taiwan Semiconductor Manufacturing Co (台積電) is to put down roots in Dresden.
Photo: EPA-EFE
For all the region’s advantages — a good location and an established industrial base — its politics could yet be a drag.
In Saxony, which already hosts the biggest concentration of chipmakers in Europe, the far-right Alternative for Germany (AfD) party is polling more than 30 percent ahead of European and regional elections later this year.
Success for the AfD risks “holding back our growth potential,” said Frank Boesenberg, head of regional industry lobby group Silicon Saxony.
Chipmakers in Saxony are to have 25,000 jobs to fill by 2030, while the local working-age population is to shrink by 300,000, the group estimates.
“There are too few young people in the region,” Boesenberg said. “We need immigration.”
However, the anti-immigration politics of the AfD could put off potential recruits and damage the industry.
“A policy of isolation is a threat to prosperity,” Infineon CEO Jochen Hanebeck said on professional social network LinkedIn.
As it stands, the large majority of the industrial capacity to produce semiconductors — used in everything from electric vehicles to smartphones — is in Asia.
However, recent supply disruptions and rising geopolitical tensions in the region have prompted a rethink in the US and Europe about depending on imported chips.
The result has been a concerted effort to relocate supply closer to home, leading to a flood of investments into areas like Saxony.
About 68 percent of German managers fear the country could become less attractive to foreign workers if the far-right gains in strength, a poll by the IW Koeln think tank showed.
In January, revelations by investigative outfit Correctiv that AfD members discussed a mass deportation plan at a meeting sparked a wave of protest in Germany.
However, companies such as Jenoptik AG, a producer of optical components for chipmakers, had been warning well before the controversy that the AfD poses a risk to business started.
If the industry is no longer able to find “the right people,” the impact could be felt on the bottom line, Jenoptik chief executive Stefan Traeger told German weekly Der Spiegel in December last year.
A lack of suitable workers was “the biggest challenge” facing Germany’s industry, German Minister for Economic Affairs and Climate Action Robert Habeck said earlier.
The country would need 5 million more workers by 2030 to cover the shortfall in all sectors, IW Koeln said.
At Infineon’s new factory in Dresden, which should begin production in 2026, the group expects to hire 1,000 new workers.
Foreign workers are to be an important “building block” on the way to achieving that target, Infineon human resources head Tom Geyer said.
The group’s workforce in Dresden already has representatives from a few dozen nationalities.
To find potential new hires and bring them to Germany, Infineon has signed deals
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