hy are so many multinational companies in fast-growing industry sectors choosing Saxony locations when expanding their footprint in Germany? From automotive to chemicals to advanced high-tech players, the common denominator is Saxony's "network of networks." Research networks enhance the work force. Supplier networks maximize industrial efficiency. And state-of-the-art transportation and communications networks make the Federal State a versatile and competitive business environment. GLOBALFOUNDRIES, Infineon, BMW, Volkswagen, DHL, Dow Chemical, Hitachi and WICOR are just some of the multinationals with operations in Saxony.
      Saxony's research infrastructure is focused directly on the needs of the business community, and not just at the seven universities. Research is also conducted at more than 50 non-university institutions, which results in technologies and processes being transferred faster into production than anywhere else in the world. For example, the latest generation of photomasks is developed at the Advanced Mask Technology Center (AMTC) Dresden and produced by the Toppan Photomasks Corporation in the same building. The customers – GLOBALFOUNDRIES and Infineon – are located right around the corner.
      Saxony consistently attains top rankings as Germany's fastest-growing economy when it comes to GDP and industrial sales. This is primarily due to the work force. Compared to the German average, Saxons work 62 hours longer per year and at an internationally competitive wage level – 81 percent of the federal German average. Furthermore, almost 90 percent of Saxon workers have a professional degree – the most in all of Germany.
      It is in Saxony where the European highways E55 and E40 intersect, linking the north with the south and the west with the east. In addition to its prime location in the heart of Europe, Saxony's transportation infrastructure features well-developed federal expressways, two international airports and a dense rail network.
      Favorable real estate prices and the logistics network help minimize costs for businesses, but Saxony is attractive to workers, as well. The Saxon state capital, Dresden, was named the city with the highest quality of life in Europe by Manager Magazin in 2005. Saxony is among the states with the lowest cost of living in Europe.
      Several industries call Saxony home, from automobile manufacturing to microelectronics and IT to photovoltaics. Following are snapshots of the Federal State's signature industry sectors and why they are expanding.
      Vehicle construction is the driving force of Saxony's economy, contributing almost one quarter of the total turnover in industry and more than half of the total turnover in exports. "Autoland Saxony" has been providing people with mobility for more than 100 years. Today, approximately every tenth passenger car built in Germany comes from the Federal State; Volkswagen, Porsche and BMW all operate production sites in the state, and a modern, globally active supply industry has emerged to support these manufacturers. About 70,000 people work in approximately 500 companies related to the automotive sector.
      Volkswagen AG Group employs approximately 7,300 people at its production sites Zwickau, Chemnitz, and Dresden. The company builds Golf, Golf GTI, and Passat sedans at the Fahrzeugwerk Zwickau of the Volkswagen Sachsen GmbH corporation for the global market. The facility also produces the painted bodies for the VW Phaeton and the Bentley Continental models GT, Flying Spur, and GTC. An in-house pressing plant and competence centers for aluminum attachment parts and special vehicles are also in place. The Phaeton, Volkswagen's luxury car, is made at the Automobilmanufaktur Dresden GmbH plant. The "Transparent Factory" blends perfectly into the cityscape of the metropolis on the Elbe River. Customers can watch the individual work steps of the new vehicles up close, which is quite unique.
      The Dr. Ing. h.c. F. Porsche AG corporation selected Leipzig as the site of the assembly plant of its third and fourth model series. The Cayenne sports utility vehicle was launched there in the summer of 2002. Between 2003 and 2006, the high-performance sports car Carrera GT was also manufactured there. Beginning in 2009, the new, four-seat coupe Grand Turismo Panamera will be produced at the site as well, increasing the number of jobs at the factory from 400 to 1,000.
      BMW AG also focused on Leipzig as the site of its new plant. The Saxon venue emerged as the winner of the international contest that included more than 250 candidate sites. BMW has been building the 3-series sedan in Leipzig since May 2005. In 2007, two new products were added – the new, three-door 1-series model and the new 1?series coupe. About 5,000 new jobs have been created on the premises, approximately half of which are directly with BMW.
      Motorenwerk Chemnitz, part of Volkswagen Sachsen GmbH, supplies factories of the VW Group around the globe with modern gasoline engines equipped with the new FSI and TSI technology, and with TDI diesel engines. The Saxon location is the exclusive supplier of TSI technology – gasoline direct injection engines with turbo-charging and/or double injection. The manufacturing and delivery program includes such essential engine components as balancer transmissions.
      Most of the WEIGL Group AG's production is carried out in its five Saxon factories. In the sectors metal cutting, hobbing, and aluminum casting, the company functions as a systems supplier for engine, transmission and chassis components. The corporate group specializes in innovative, high-precision transmission and engine components as well as aluminum castings for drive systems and chassis. The company has built Europe's most modern aluminum low-pressure sand-casting foundry in Saxony.
      The Elterlein plant of TAKATA-PETRI (Sachsen) GmbH Airbag supplies modules for European automobile manufacturers. Gas inflators for airbags are manufactured at a second Saxon factory in Freiberg. Cold gas and hybrid inflators are produced at a third location in Döbeln. Since 1995, the Japanese Takata Group has created approximately 700 new jobs in Saxony.
      Saxon competence in passenger protection is the focus of the Swedish-American Autoliv Group. Autoliv Sicherheitstechnik GmbH, Werk Ost, in Döbeln, manufactures automatic seatbelt systems, seatbelt height adjusters and pyrotechnic pretensioners. Döbeln is also home to Autoliv's European training center.
      The French automotive supplier Faurecia has put its first global multi-module factory into operation in Leipzig. Seats, cockpits and front ends are manufactured on the premises of the BMW plant and delivered directly to the BMW assembly line.
      The site location campaign "Germany – Land of Ideas" officially nominated Leipzig University's Professorial Chair of Molecular Biological-Biochemical Process Technology as a specific Landmark 2009. Staff members at the professorial chair, which is part of the Center for Biotechnology and Biomedicine (BBZ), have developed a tiny 3D biochip. The two-by-two-cm chip is able to test tissue samples for the effectiveness of such pharmaceuticals within milliseconds. Lab tests of tissue sections can take several weeks.
      The "third generation" in biotechnology includes industrial applications of biotechnological products and procedures. Enzymes, or bioactive protein molecules, play a major role, because they account for all (bio)chemical reactions in nature.
      The c-LEcta GmbH corporation, founded in Leipzig in 2004, specializes in the development of industrially applicable enzymes. The corporation has set up an enzyme-technology platform that spans the entire value chain from discovery to optimization all the way to the production of new enzymes. In addition to a patented screening method that permits the quick identification of suitable enzymes, the company developed a procedure for the production of artificial enzyme banks and its own production systems. "The c-LEcta GmbH is an outstanding example of successful knowledge transfer to products and markets, and this makes us very proud," says Dr. André Domin, Managing Director of BIO CITY LEIPZIG.
      This success story was made possible through a biotechnology initiative launched in the Federal State of Saxony in 2000. Since then, the incubators BIO CITY LEIPZIG and BIOZ Dresden have been created, and the region supports 12 professorships, research groups and special biotech projects. In the 18 months leading up to June 2008, the staff of the 60 enterprises founded since 2000 increased by 15 percent to 1,500 employees; the German average increased by only 4 percent.
      The "biosaxony" brand is evolving into a leading biotechnology cluster, generating a turnover of about 550 million euros per year. Sixty-seven percent of Saxon biotech companies are active in the sector red/medical biotechnology, 23 percent in the sector white/gray biotechnology and 10 percent in the "green" technologies, working on behalf of agriculture.
      It sounds a little bit like science fiction: Human skin is produced synthetically by euroderm GmbH, founded in Leipzig in 2002. But the product EpiDex is reality. The equivalent of the human outer skin – the epidermis – raises a lot of hope for many people. For victims of accidents and people with severe burns or deforming birthmarks, the synthetic skin represents an alternative to traditional treatments.
      Until now, such impairments could only be treated with skin transplants. Skin grown from endogenous stem cells by euroderm in cooperation with Leipzig's Fraunhofer Institute for Cell Therapy and Immunology IZI, however, can be grafted in ambulatory surgery and can hardly be distinguished from natural skin. "Only the hair and the sweat glands are missing," explains Dr. Andreas Emmendörffer, managing director of the Leipzig-based biotech enterprise. In order to produce EpiDex, stem cells from the roots of patients' hairs are multiplied in cell cultures. The emerging tissue can be transplanted about 30 days after the hair had been extracted, and it will then grow into the natural skin within six to eight weeks.
      One of Saxony's growth markets is environmental technology. After German Reunification in 1990, great efforts were made to remove environmental damages caused during the Communist regime in East Germany – whether it be through the rehabilitation of former open-pit uranium and lignite mines, the disposal and cleanup of hazardous waste or the comprehensive modernization of virtually all wastewater collection and treatment facilities in the state. The completion of these tasks has resulted in considerable knowledge and expertise on the part of private companies working in this field.
      A study published by Roland Berger Strategy Consultants in early 2009 predicts an average annual growth of 4.5 percent over the next few years in Saxony's environmental technology sector. In 2007 alone, the turnover increased by 17 percent and the number of employees by 10 percent. According to Dr. Roland Hähne from the environmental technology network "Saxutec," Saxony's environmental technology firms are active in 50 countries around the globe. Environmental engineering and planning contribute a major share. The Saxony Economic Development Corporation (WFS) plans to further increase "Greentech Saxony's" commitment abroad.
      "Silicon Saxony" is Europe's largest and most successful initiative for the semiconductor, electronic and microsystems industry. Established in 2000, it now unites 270 commercial enterprises as well as research institutes, universities and colleges under one roof.
      The competencies of the member companies represent the entire value chain of the microelectronics industry, from design and cooperation with suppliers to silicon and wafers, to ultramodern manufacturing processes to individual chips – all the way to complete applications. Member companies increasingly enter such expanding sectors as the photovoltaics and solar industries.
      With the move from Stuttgart to Saxony, Europe's most important semiconductor trade show, SEMICON Europa, comes to the location with the greatest concentration of the sector on the continent. About 43,500 Saxons are working in approximately 1,200 companies, which translates into around 70 percent of all employees in the German semiconductor industry.
      This important trade show, to be held in Dresden for the first time between October 6 and 8, 2009, is organized by the leading branch association SEMI, which represents the interests of the equipment and material suppliers in the semiconductor industry around the globe.
      "We're going where the leading cluster of the semiconductor industry is located: Silicon Saxony has evolved into one of the most important microelectronics locations in Europe as a result of its farsighted policy for business setups," says Mr. Heinz Kundert, President of SEMI Europe (http://www.semi.org/eu), in explaining the reason behind the trade show's move to Saxony. "A vibrant cluster with great potential has emerged around the branch leaders. Today, every second European chip is manufactured in Saxony. This makes Silicon Saxony the research, development, and production site in Europe. You can't get any closer to your customers."
      Building on its microtechnology competencies, Dresden has evolved into an efficient and effective center for nanotechnology and nanoelectronics over the past few years. At the same time, the city has grown into a powerful and vibrant research community in these fields. Eighty of Germany's 500 nanotechnology enterprises and 40 research facilities are located in the Dresden region alone, making the region one of the centers of this sector in Germany.
      This creates a wide range of opportunities for small and mid-sized enterprises in the machine and plant construction industry as well as the supply sector for automobile construction and aerospace industries. The efficient and effective transfer of technologies is ensured by the Nanotechnology Center of Competence "Ultrathin Functional Films" (Nano-CC-UFF) with more than 100 members, including the Japanese Nissho Electronics corporation.
      The accelerated transfer of fundamental research translates into marketable nanotechnological products and systems, which is the primary focus of the Innovation Cluster "nano for production" founded by the Fraunhofer Society in 2006. It is the first innovation cluster for nanotechnology and a clear sign of the venue's significance in this sector.
      During the last few years, the Federal State of Saxony has been experiencing a boom in the solar industry and is rapidly turning into Germany's trendsetter in this sector. This is due in part to the microtechnology cluster, which is already very strong and closely related to photovoltaics. For many suppliers such as Applied Materials, it is possible to be active in both sectors. Another reason is the in-depth knowledge about such basic chemical components as silicon, which has its roots in the former mining tradition. This was decisive for the global player Solarworld in selecting the Saxon city of Freiberg as its production site. Today, the Group encompasses the entire value creation chain, ranging from pure silicon to wafer and module production all the way to recycling.
      Solarworld is currently building an integrated solar silicon wafer and solar cell factory in Hillsboro, Oregon, which will reach a capacity of 500 megawatts this year.
      While Solarworld focuses on solar silicon wafer technology, Signet Solar, headquartered in Menlo Park, Calif., has developed a specific technology that couples particularly large substrates with thin film technology. After searching worldwide for a suitable production site, Signet Solar decided in favor of Saxony with its strong R&D resources. "Saxony was chosen because of its semiconductor industry, availability of specialists and access to universities and institutes as well as the future market for end products," says Gunter Ziegenbalg, Managing Director. "Signet will expand its current production capacity from 20 MW to 130 MW within the next 18-24 months, depending on the market situation." Besides the abundant solar-industry expertise in Saxony, Ziegenbalg cites "close access to transportation and suppliers of glass, equipment and other materials" as the area's main advantages.
      Signet Solar wants to reach grid parity with its product within the next three years. Among the corporate groups which have gained the most comprehensive experience in CIS thin film technology are Shell and Saint Gobain. They founded the AVANCIS corporation as a joint venture, which started its production in Torgau, Saxony, in the fall of 2008. Highly efficient thin film silicon wafers have been developed by the ARISE corporation, based in Kitchener, Ont., Canada. The company has started production in the small Saxon city of Bischofswerda and plans to sell its products primarily in North America.
      What makes Saxony so interesting to the photovoltaics industry is that R&D are state-of-the-art, and all technologies currently used around the globe are in place. All of the important suppliers can be found in the immediate vicinity, including Roth & Rau, Von Ardenne Anlagentechnik and FHR Anlagenbau, to name just a few.
      "Solar cells are high-tech products; and in manufacturing, the photovoltaics branch is increasingly following the lead of the chip industry," says Carsten Körnig, Managing Director of the German Solar Industry Association (BSW-Solar). "In the international competition for the best solar technologies, Saxony will benefit greatly from its profound experience as a renowned venue of semiconductor production." And when it comes to solar power plants, Saxony is heading the field as well. With a total output of 40 megawatts, the world's largest solar power plant is currently under construction near Leipzig.


      This investment profile was published under the auspices of the Saxony Economic Development Corporation. More information can be found on the Web at www.invest-in-saxony.com.