European chip production not competitive, warns Infineon CEO

Christoph Hammerschmidt, EETimes Europe
(07/18/2007 7:38 AM EDT)

LUDWIGSBURG, Germany — Infineon CEO Wolfgang Ziebart warned the European semiconductor production has already lost its competitiveness against Asian countries. Wages are too high and government aid is too low in Europe, he said.

Ziebart made his statement during his keynote speech to the 11th Automobil Elektronik congress on automotive electronics in Ludwigsburg. His presentation discussed changes in semiconductor industry and how they affect automotive electronics.

"I need to put an end to a widespread fairy tale: The myth that wages in the semiconductor industry do not carry authority since the industry is so capital driven", he said. "Actually, in advanced logics production, the labor costs add up to 25 percent in Germany, in power devices it is up to 30 percent." He added that the share of the wages of total operating costs again climbs significantly when a production line has been written off. "This is why depreciated fabs in high-salary countries are endangered to an extremely high degree", he warned.

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