InterviewSaxony believes Korean chipmakers can afford to invest in German state

Thomas Horn, CEO and managing director of Saxony Trade & Invest / Courtesy of Saxony Trade & Invest

The German state of Saxony remains optimistic about attracting semiconductor investments from Korea, despite U.S. President Donald Trump's pressure on global chipmakers to expand manufacturing in his country and the ongoing large-scale factory construction by Samsung Electronics and SK hynix near Seoul.

"We do not view global semiconductor investment as a zero-sum equation," Saxony Trade & Invest CEO Thomas Horn told The Korea Times via email on Sunday. "Leading companies are increasingly pursuing geographic diversification to strengthen supply chain resilience rather than concentrating capacity in a single region."

The head of Saxony's state government-run investment promotion agency made the remarks ahead of a business delegation from Saxony and neighboring Saxony-Anhalt arriving in Korea on Monday for a five-day trip aimed at encouraging semiconductor and tech firms here to build facilities in the eastern German state.

"The delegation's visit to Korea is focused on strengthening our strategic dialogue with the broader technology ecosystem," he said. "Our goal is to engage with a wide range of industry leaders to understand their global strategies and to discuss how Saxony's unique strengths can support their objectives."

Although Intel cited "insufficient customer commitments" last year as the main reason for canceling a 30 billion euro ($35 billion) project to build a semiconductor "mega-fab" in Saxony-Anhalt, Horn emphasized the importance of distinguishing between market segments.

"The demand for the specific types of chips produced in Saxony — namely power semiconductors, sensors and analog devices for the automotive and industrial sectors — remains exceptionally strong and is projected to grow," he said. "This is driven by the long-term structural trends of electrification and digitalization."

According to Horn, Saxony is particularly keen to attract companies in chip design, especially fabless design houses focused on artificial intelligence (AI), automotive and industrial applications.

"These are sectors where Europe has massive demand but limited domestic capacity," he said. "Companies working on AI-specific hardware architectures, specialized materials for next-generation technologies and those developing solutions for energy-efficient computing would find an ideal environment here."

With the European Chips Act of 2023, which established a strategic funding mechanism to strengthen the continent's semiconductor sovereignty, Saxony secured a 10 billion euro investment from Taiwan's TSMC in 2024 to build a semiconductor plant in Dresden, the state capital. The factory is scheduled to produce 40,000 wafers with a diameter of 300 millimeters per month starting next year.

Horn said Korean firms investing in Saxony will be able to qualify for incentives similar to those for TSMC under this framework, highlighting the European Commission’s current development of the so-called Chips Act 2.0.

Describing Saxony and Korea as regions deeply rooted in advanced manufacturing, engineering excellence and technology-driven value creation, he noted that an increasing number of the German state's technology companies are already active in Korea, particularly within the semiconductor value chain.

"The reason Saxony stands out is its unparalleled ecosystem density and the unique concentration of the semiconductor value chain within a single region," he said. "Nowhere else in Europe can a company access such a complete and tightly integrated environment — from research and design to advanced manufacturing and a deep supplier network — operating in immediate proximity."