Ifo study: Germany is one of the top nations in the semiconductor industry

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As a supplier, Germany is one of the nine most important countries in the semiconductor industry. The strongest sectors include power semiconductors, optical chips and sensor technology. This is the result of a study by the Munich Ifo Institute and the European economic research association EconPol Europe. "If you consider not only the trade in finished chips, but also the equipment for manufacturing and the raw materials, Germany exports more than it imports," explains Lisandra Flach, Head of the Ifo Center for International Economics.

Southeast Asia leads the semiconductor industry

In 2022, around 70 countries worldwide were involved in the semiconductor industry with a trade volume of around 1.2 trillion US dollars. The distribution of finished chips, especially logic and memory chips, accounts for the largest share of this. Overall, China, Taiwan and South Korea account for more than half of global semiconductor exports, which are primarily attributable to the sale of integrated circuits. The USA, Japan and Germany have recently caught up in terms of exports of power semiconductors, optical chips and sensors. The World Semiconductor Industry Association recently confirmed that the German chip economy was in decline.

German companies are leaders in the sale of semiconductor-based converters. They have a larger export share in this sector than companies from China and Taiwan combined. Germany ranks second behind China in the export of thyristors, diacs and triacs. The same applies to the markets for simple diodes and transistors with a dissipation of more than one watt. In the segment of transistors with a dissipation of less than one watt, the German semiconductor industry is in third place behind China and Japan. It also ranks third behind China and Malaysia in the export of non-lighting diodes.

Germany is the largest chip exporter in the EU

In Europe, Germany is the largest exporter of semiconductors and accounts for around a third of chip sales by EU countries. It is followed by Ireland and France, which together account for a further third of semiconductor exports from European countries. Worldwide, the German semiconductor industry has trade surpluses with five of the leading nations in the sector, including China, South Korea and Singapore. Germany has trade deficits with Taiwan, Japan and Malaysia.

While Asian companies maintain their market leadership by selling finished chips, the USA, Japan and Germany are net exporters of equipment for the semiconductor industry. This includes production systems and associated parts, as well as ventilation and filter systems and machines for chip quality control. Although the USA is the largest exporter of semiconductor equipment, the Japanese industry has the largest trade surplus.

Countries want sovereign semiconductor production

In addition to the economic situation, the researchers also examined the legislation of countries in relation to the semiconductor industry. The number of political measures in this sector has been growing steadily since 2017. This has accelerated significantly since 2021. While there were still around 500 resolutions with an impact on the chip industry worldwide in 2021, there were already around 2,300 government measures in 2023.

The authors of the study attribute the political changes to the semiconductor shortage in 2021, which prompted governments to want to bring the industry into their own countries in order to strengthen their own economies and avoid bottlenecks. Although the authors of the Ifo study recognize the economic and security policy consequences of a chip shortage, they advise against this approach. The countries involved in the semiconductor market are already sufficiently dependent on each other to have room for negotiation. In addition, entering the semiconductor production market involves high investments that do not guarantee economic success.

(sfe)