The American semiconductor group is building a new $350 million fab next to its old plant in Itzehoe. The field is prepared, the connections have been made and all the legacy issues have been removed. In the coming days, the workers can get started. They will drive no fewer than 500 stakes, around a meter in diameter, into the spongy soil, creating a firm base for the construction and pouring heavy concrete slabs; they will build walls, put up a huge roof and create an almost dust-free production area on an area the size of a soccer field, in which conditions prevail that actually only exist in space.

There are supposed to be around 60 heavy machines there, the cheapest of which costs a million dollars. They are used in hundreds of steps to produce electronic semiconductor components that have structures that are a hundred times finer than a human hair. But it will still take a few months until then.

Today, Monday, is the symbolic groundbreaking ceremony in the far north of Germany. The next chip factory in Germany is being built in Itzehoe – a plant owned by the American company Vishay Intertechnology Inc. The board of directors is putting the pressure on. The decision to build the new building was made quickly, and now it is to be implemented just as quickly. Because Vishay is supposed to start the complicated chip production in record time. Customers all over the world are already pushing hard.

A hundred times thinner than a hair

The topping-out ceremony will be in the fall, and the shell will be ready in the winter. The virtually dust-free clean room has to be installed, the machines have to be connected, production is to be slowly started up and ramped up at the end of 2025. After all, it takes another few weeks until the first wafers with the coveted electronic components are produced. A pizza-sized, shiny silver silicon disk contains around 400,000 components; each of these elements is only a fraction of a micrometer in size. Finest precession work, that's what Vishay is all about.

Their new factory is not far from the old one. The Americans are paying $350 million for the expansion. They don't even expect state aid from the EU Chips Act or from special research funding programs. "We're not cutting-edge, we're not a medium-sized company either, maybe we're just not fancy enough," says Tilo Bormann, head of Vishay's wafer production and the person responsible for the products that will be manufactured in the Itzeho factory in the future. "We're kind of slipping through the cracks. So we do it alone.”

Chips are crucial for a modern industry, as almost every sector needs them. That's why the major industrial locations are all upgrading: America and Europe, Korea, Taiwan and Japan are attracting investors with subsidies totaling a three-digit billion dollar volume.

While Asians and Americans are already having the first mega-factories built at gigantic expense as part of their industrial policy, the investment rounds in Europe have so far been a bit smaller. Infineon wants to build a 5 billion euro factory in Dresden from autumn, the US manufacturer Wolfspeed with the German industrial group ZF one in Saarland, Intel a chip complex on the outskirts of Magdeburg. STM and Globalfoundries are building a new factory in France.

Any state aid is accompanied by conditions and constraints, says Leif Henningsen, managing director of the German subsidiary Vishay Siliconix. Negotiating takes months and costs resources. But with Vishay, they have everything but time. Because the customers from the industry are desperately looking for chips. Without these small electronic storage and control miracles, hardly a wheel would turn in the economy. Above all, customers from the automotive industry are calling for more semiconductors. According to Henningsen, the order books are well filled.

Vishay is a publicly listed semiconductor company that is one of the world's largest manufacturers of so-called discrete modules and passive electronic components. Its chips can be found in vehicles and industrial equipment, but also in computers, medical devices, military systems and telecommunications equipment. Around two thirds of the Group's revenues are attributable to customers from the automotive and various industrial sectors. However, Vishay is not only a highly specialized, but also one of the oldest chip manufacturers in the world.

Turbulent history

The company was launched in the early 1960s. Its founder was Felix Zandman, a Polish-born Holocaust survivor. After the war he had studied physics in France, received his doctorate from the Sorbonne and started his career at the École de l'air. In the mid-fifties he went to the USA. In 1962 he founded his company and named it after his home village of Veisiejai in present-day Lithuania. Today the company is an important link in the global network of the chip industry.

Vishay made nearly $3.5 billion last year. It posted an operating profit of $615 million and a surplus of $430 million. The chip manufacturer from Malvern, Pennsylvania, has a market value of 2.6 billion dollars on the New York Stock Exchange. The group employs almost 24,000 people and is active in virtually all major markets around the world.

By the end of next year, the Management Board will be making massive investments in the expansion of production so that the continuing demand for all important products can be met. Vishay still makes many of its building blocks himself. It also operates a handful of chip factories, one of which is in Itzehoe in Schleswig-Holstein. This factory is the only one in the Vishay group that produces special chips that are installed in cars and industrial plants. The company concentrated the manufacture of these semiconductors in Itzehoe eight years ago.