Joerg Recklies, a tall, energetic 32-year-old with a boyish face, is a good example of why technology companies from around the world are spending billions of dollars to build new production and research facilities in the eastern German state of Saxony.
Government officials are boasting about the creation of a Saxon “Silicon Valley” in this region, which historically was one of Germany’s richest and most industrialized.
There might be a touch of hype in the sloganeering, but there is also a mother lode of substance. With the help of people like Recklies, Saxony is producing everything from silicon to make computer chips to the chips themselves.
As a boy, Recklies dreamed of becoming a professional soccer player, but he was excluded from one of the former East Germany’s elite sports schools because his father was born in West Germany. The Communists assumed he couldn’t be trusted.
While the East German educational system had its peculiarities, it also had its strengths, and Recklies tried to make the most of the situation.
By the time he graduated from high school, he spoke English and Russian, had spent 10 years studying physics and the natural sciences and was certified–and had experience–as an electrician testing and servicing equipment.
After three years in the army, and 4 1/2 years at one of Germany’s oldest technical schools, he graduated as a microelectronics engineer. For his graduation thesis, he designed a new, faster computer chip.
Now he works at Siemens, which built a semiconductor fabrication plant on a former Soviet army base on the northern edge of the city. He is part of a small army of skilled workers that has attracted Siemens of Munich, Advanced Micro Devices of Sunnyvale, Calif., and Motorola of Schaumburg, Ill., to locate here.
Those firms in turn have attracted a bevy of equipment manufacturers and service firms, such as Applied Materials, Cannon and Tokyo Electron. And Saxony, which is in Germany’s southeastern corner, has a concentration of technical universities and research institutions rivaling that of the most advanced western German states.
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“Dresden was the center of microelectronics for the East,” said Jack L. Saltich, general manager of AMD’s new chip fabrication plant here. “There is a huge number of people here. They don’t have experience with contemporary technology, but they have a lot of education and practical experience with semiconductor technology.”
AMD is spending $1.9 billion on the factory and new research and development facilities, including $445 million in subsidies from the German federal government and the state of Saxony.
AMD plans to employ 1,600 in its plant, where it will make its newest microprocessor for personal computers, the K7, which is expected to run at 500 MHz or more. Production will start at the end of next year.
Siemens has invested $1.8 billion–also with $445 million worth of state and federal subsidies. It also has established what it calls a center for excellence to do advanced research and development on chip technology.
Its plant initially is manufacturing 16-megabit memory chips, but will soon move to making 64-megabit chips. It now employs more than 2,500 and employment is still climbing. Siemens had planned to be employing only 1,450 by now.
“I’ve got the impression they are very well-trained. The skill levels are very high,” said Wolfgang Ganser, a West German who is deputy director of the Siemens Microelectronics Center, of the company’s Saxon employees.
Ganser said that Dresden’s university was famous for technology, even during communist times. He said he remembers that when he was a physics student at Munich’s technical university in the 1960s, he studied textbooks written by Dresden professors.
Siemens and Motorola also have a joint venture in which they plan to spend at least $830 million, including $188 million in government subsidies, for a production line using the most advanced technology to make chips.
The line, which is supposed to start up a sample production by the end of this year, will make chips out of 12-inch wafers, cutting the overall costs of manufacturing.
If the venture meets its startup target, company officials said, it will be the first line of its type in the world. It is expected to create 450 jobs initially and thousands eventually.
In addition, in the city of Freiberg, about 25 miles southwest of Dresden, several parts of an old East German company have been privatized and are being rejuvenated. Wacker Siltronic is making silicon crystals and recently broke ground to double capacity.
Freiberger Compound Materials, a venture of Federmann, an Israeli firm, with support from Daimler-Benz and Siemens, is producing gallium arsenide wafers for specialized chips. It hopes to capture up to 40 percent of the world market in four years. And Bayer Solar is producing silicon wafers for photovoltaic cells.
All of this is beginning to create an impression.
“Saxony has a chance to be one of the great economic success stories of the post-Cold War era,” said Mark R. Anderson, president of Technology Alliance Partners, a Friday Harbor, Wash., consulting firm that helps technology companies develop business strategies.
The high-technology industry in and around Dresden has given the city the lowest unemployment rate of any city in the former East Germany, 17.2 percent. Saxony’s unemployment is 21.8 percent, the lowest of any of the five new east German states.