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Germany

Germany is known for its automotive industry and industrial machinery.
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Description

Germany is the largest economy in Europe and the fifth largest economy in the world (as of 2020). It is among the three largest trading nations on a global basis. The country is renowned for its automotive industry, led by BMW, the Daimler Group (Mercedes-Benz, Freightliner Trucks, Detroit Diesel, et al.), and the Volkswagen Group (VW, Audi, Porsche, Bentley Motors, Lamborghini, MAN, Scania, SEAT, Škoda). A number of Tier 1 automotive suppliers are based in Germany, namely Bosch and Continental. Germany is also a world leader in industrial machinery (including companies like Siemens, Thyssenkrupp, Fresenius, and ZF), but its role in semiconductors has been limited.

Automotive

However, fundamental shifts are challenging the German auto industry, which is struggling to transform itself from precision metal bending to advanced electronics. Traditional automotive companies (such as VW, BMW, Daimler, Audi, and Porsche) are seeing competition from newcomers like Tesla, Waymo, NIO, and a number of very nimble startups.

Whereas these newer auto companies have electronics as a core expertise, for traditional German automakers the starting point has been highly complex mechanical systems — primarily internal combustion engines — with electronics augmenting the behavior of those systems.

A significant portion of the Germany economy rests on the auto industry: it represents 5% of the country’s GDP and 820,000 jobs, according to The Financial Times. (In comparison, in the United States, automotive accounts for about 3% to 3.5% of total GDP.) A slowdown in sales, coupled with a delay in the development of autonomous driving technology, is being felt across Germany’s entire tech industry.

Semiconductor & fabs

The country may also be facing a lack of engineers entering the semiconductor industry. The IW Institut in Cologne says there were more than 300,000 engineering, science, and technology positions that went unfilled in April of 2019. PwC estimates this hiring bottleneck for small and medium-sized businesses could cost €65 billion (about $71.9 billion) in lost revenue.

Germany houses a number of fabs in Dresden, including three GlobalFoundries 300mm fabs, an Infineon fab making chips on 200mm and 300mm wafers, and an upcoming Bosch Semiconductors 300mm fab.

Germany has a number of semiconductor manufacturing equipment suppliers, led by Aixtron, headquartered in Herzogenrath. There is also Stuttgart-based Exyte, which specializes in building wafer fabs and other high-tech facilities.

A number of EDA companies are also based in Germany, including OneSpin Solutions, Silexica, MunEDA, and Pro Design/proFPGA.