X-Fab is expanding the chip factory in Erfurt – the federal and state governments are supporting it with 127.4 million euros

The need for semiconductors for AI applications, data centers or optical systems is huge. Thuringia benefits. The semiconductor manufacturer X-Fab is expanding its production in Erfurt. The federal and state governments are supporting the project with a three-digit million sum.

One of the largest industrial investments in recent years is starting in Thuringia: The semiconductor manufacturer X-Fab is building a new chip factory and thus expanding its production in Erfurt. According to the company, the foundation stone will be laid this Monday. A spokeswoman for X-Fab Global Services GmbH said on request that 300 to 400 million euros would flow into the major project.

At the end of last year, the EU approved state financial aid for new chip factories in Erfurt and Dresden. The reason: Europe should become more independent in the production of semiconductors, the demand for which continues to increase with digitalization and the use of artificial intelligence (AI). Europe is currently heavily dependent on imports, especially from Asia.

According to the state government, the federal government and the state of Thuringia are supporting the investment in another chip factory in Erfurt with a state financial injection totaling 127.4 million euros. According to the company spokeswoman, the federal government has committed 80.3 million euros, and Thuringia is contributing 47.1 million euros.

The investment is being made because the existing X-Fab MEMS Foundry GmbH factory for microsystems is largely at capacity due to high demand. “The need is there,” said the company spokeswoman. The tiny components combined electronic and optical functions. For example, they would be needed for AI applications, the infrastructure of data centers, optical systems or medical technology.

In the second quarter alone, the X-Fab Group's sales in the microsystems and photonics area increased by 14 percent. It is the fastest growing division of the company. The plan is for the first semiconductors to be manufactured in the new factory under clean room conditions at the end of 2028. Around 100 more jobs would be created.

The X-Fab Group has factories in Germany, including Dresden, Malaysia, France and the USA. Of the approximately 4,000 employees worldwide, around 800 work in Erfurt, which is considered the operational headquarters. The legal headquarters of the holding company is in Tessenderlo in Belgium. Unlike the company Globalfoundries in Dresden, for which the EU had also approved funding, X-Fab is not a mass manufacturer, but rather produces semiconductors for special applications on behalf of customers.

The internationally operating X-Fab Group, which is listed on the Paris stock exchange, has its origins in Erfurt. There is a long tradition in semiconductor production in the Thuringian state capital, which began in the GDR with the headquarters of the Microelectronics Combine.