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In Germany this summer you can use local public transport for 9 euros a month. Innovation Origins takes the opportunity to visit a number of future projects. In this episode we travel to Magdeburg.
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Traveling with the 9-euro ticket. Part 3: In the footsteps of Nord Stream and Wernher von Braun – Innovation Origins
As of Wednesday, no Russian gas will be routed through the Nord Stream 1 pipeline in Lubmin. The question is whether it will stay that way.
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Magdeburg is not exactly a thriving business and tourism center. The gem of this Hanseatic city between Berlin and Hanover is the “Magdeburg Cathedral”, which towers above everything with its dark towers. There are a few nice sculptures here and there in the city, there is a lot of greenery and the view of the Elbe is beautiful. But then you’ve had enough.
The capital of Saxony-Anhalt is best known for the tomb under the cathedral. Otto the Great is buried there, the first Emperor of the Holy Roman Empire, who was crowned by a Pope (John XII) in 962.
The grave shows how important Magdeburg once was. Ideally located on the Elbe and Havel, it was a European trading center for centuries. It was the birthplace of some famous people such as Adelbert Delbrück (the founder of Deutsche Bank) and the composer Georg Philipp Telemann. Little remains of this wealth, however, as the city was largely destroyed during World War II.
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The cathedral, the tomb, parts of the old city wall and a statue of the black Saint Mauritius from 1240 are rare testimonies to Magdeburg’s glorious times.
To get an idea of what the city must have looked like in the past, it is better to visit smaller towns in the area such as Brandenburg an der Havel (also heavily bombed, but more on the fringes) and Naumburg.
Clear cut after the GDR
Nevertheless, Magdeburg was still well known after the Second World War, not because of its beauty, but because of the mechanical engineering, which has a long tradition in the city. It was not for nothing that Magdeburg was nicknamed the “City of Mechanical Engineering” during the GDR era.
But after the fall of the Berlin Wall in 1989 came the big upheaval. The heavy engineering combine “Ernst-Thälmann (SKET)” with 30,000 employees was largely lost. Only a few smaller companies remained. Today, for example, parts for wind turbines are manufactured in Magdeburg.
However, Magdeburg is not one of the leading industrial cities in Germany, which is also reflected in the city’s population. In 1940 the city had 346,000 inhabitants. By 1989, that number had dropped to 290,000. Today there are only 236,000. This puts Magdeburg outside the German top 30 and, within Saxony-Anhalt, has to compete with Halle, 90 kilometers to the south.
Minister Schulze sees a new era dawning
“But better times are coming,” says Economics Minister Sven Schulze during a visit to his office right next to the main train station.
Schulze points out that the population decline stopped a few years ago. With the “Otto von Guericke University” and the “Magdeburg-Stendal University” (H2) the city also has two educational institutions of international standing.
17 billion from Intel
But Schulze has much bigger dreams than those of a beautiful university town. He is convinced that Magdeburg could become the center of the European semiconductor industry. It already has a name: Silicon Junction, which of course refers to its American counterpart in California. The big catalyst is that American chip giant Intel.
A few months ago, the papers for the largest foreign investment in Germany to date were signed. Intel will invest the modest sum of 17 billion euros in production facilities on the outskirts of the city. For comparison: The “Gigafactory” of the car manufacturer Tesla in Grünheide near Berlin cost around 4 billion euros.
There is not much to see on the 450 hectare site (675 soccer fields). “Eulenberg is still a hill,” says Schulze, “but we can be sure that it will develop into one of the most modern business parks in Germany, where not only Intel but also other technology companies are located.”
Dublin
The best example is Leixlip, a village just outside Dublin where Intel settled in 1989. Back then, the Irish government lured Intel with millions of Irish pounds, but got a lot in return. Since then, the Americans have invested 18 billion euros in several factories, and another 12 billion are planned.
The next factory is already under construction in Collinstown Industrial Park, where Intel employs 4,500 people. The once poverty-stricken farming community of Leixlip now rivals the best neighborhoods in Paris or London for house prices.
Construction to start next year
Schulze would like it to be the same for Magdeburg. Construction of the factory will begin next year, and the first ‘wafers’ (the plates on which the chips are placed) are expected to roll off the line in 2026 or 2027.
Machines from the Dutch company ASML are also expected to be represented at Intel. The latest generation of so-called ultraviolet lithography technology (High-NA EUV) is expected to be used in Magdeburg, which requires machines from ASML.
An ASML engine costs about $270 million. It’s a technology that Intel has neglected so far, but Americans are looking to catch up in the years to come. Magdeburg and Ireland will play a key role in this, but investments are also planned in France, Italy, Spain and Poland.
Billion dollar subsidy
All this does not happen without subsidies. Schulze does not want to give a number, but German media reports that the sum in Magdeburg is almost 7 billion euros.
The green light from Brussels is still missing, but according to Schulze this is a formality, because the European Commission is also interested in growth in the chip industry and has set up the so-called for this purpose „European Chips Act“ brought to life.
The aim of this regulation is to make Europe more independent of Asian and American chip groups with the help of state aid worth tens of billions.
bottlenecks in the labor market
Schulze is aware that there is still a lot to do. Magdeburg’s location is excellent in itself, in the heart of Germany, right on the A2 from Oberhausen to Berlin. But the infrastructure could be better.
This applies not only to road, train, tram and bus connections. There should also be more and more modern apartments. Magdeburg has gotten some nice new housing estates in recent years, for example along the Elbe, but that’s not enough.
During the construction phase of the Intel plants alone, around 7,000 workers are expected to be employed, all of whom will have to live somewhere. From 2027, around 3,000 people will be employed at Intel. “And that could be even more in the next few years,” says Schulze. Additionally, as mentioned earlier, he expects Intel to act as a magnet for other companies, from hospitality to industrial suppliers. These people also want to live and relax here.
tension in the labor market
In other words, thousands of additional jobs will be created. But where are all these people supposed to come from?
Labor market experts assume that it will be difficult to find enough employees. Magdeburg is also not the only East German city where billions are being invested in technological systems. Think of Tesla near Berlin, Bosch has built a chip factory in Dresden and several battery factories are planned, including a very large one in Erfurt (CATL) and one for recycling (BASF) in Schwarzheide (60 kilometers from Dresden) .
Schulze focuses primarily on people from the immediate vicinity. “70 percent of the students at our universities and colleges leave the city after completing their studies. Something would have to change there.”
Intel also counts on the presence of a number of other universities and research centers in the region. This affects seven facilities within a radius of 100 kilometers, as Christin Eisenschmid, Germany boss of Intel, said at the beginning of the year.
The project team has their hands full
According to Schulze, several employees of the ministry are currently working full-time on the project.
opportunities
Norbert Doktor, spokesman for the H2 University of Applied Sciences, sees great opportunities for the regional educational and research institutions in the settlement of the chip giant, which will undoubtedly also be associated with challenges.
On a positive note, a variety of technical courses are already available to meet the needs of Intel and its suppliers. However, more needs to be done. Doctor: “Intel will transform this region. It is such a complex matter that no one can predict exactly what it will all mean. That applies to us as a university, but also to the city, for example when it comes to improving the infrastructure and all types of facilities such as schools.”
DATA
The doctor expects a lot from the institute founded this year “German Agency for Transfer and Innovation (DATI)”, which aims to ensure that educational institutions, researchers, companies and the state work more closely together at national and regional levels. A new technical chair at the university is also being considered.
Enough student accommodation
One advantage is that nobody has to worry about student accommodation here, as a visit to the university campus shows. There are at least 9 student residences and plenty of room for more. A Dutch student city can only dream of that.
A group of Indians – two men and one woman who are studying for a technical master’s degree at the university – confirms the international character of the university. “There are more foreign students here than German ones,” says one of them. Of course they heard about the arrival of Intel. “Magdeburg is about to undergo a metamorphosis.”
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