Billion dollar deal collapsed: chip factory is not coming to Frankfurt (Oder)

Billion dollar deal collapsed: chip factory is not coming to Frankfurt (Oder)

Frankfurt (Oder) did not receive the hoped-for billions in investment for a new chip factory. The Ferroelectric Memory Company (FMC) will not build its planned factory in Frankfurt, but in Magdeburg, as Mayor Claus Junghanns (CDU) confirmed to rbb on July 18, 2025. FMC plans to invest over four billion euros in the new semiconductor factory, which specializes in the production of energy-efficient memory chips.

The government funding of 1.3 billion euros requested by FMC was a decisive factor in the negotiations. Frankfurt (Oder) was at times considered a possible location for the chip factory. In addition to the Oderstadt, Leipzig and Magdeburg were also in the race for settlement. Originally, Pirna was even discussed as a location before Leipzig came into focus.

Historical significance and challenges

Frankfurt (Oder) was an important semiconductor location during the GDR era. After the fall of communism, however, the city struggled with a loss of industrial relevance. Past large-scale settlements, such as the solar industry, failed after initial success in the 2000s. This story casts a shadow on the current situation and the efforts to position Frankfurt (Oder) as an attractive location for modern industries.

FMC's decision to build the factory in Magdeburg once again highlights the strategic importance of microelectronics in Europe. The dependence on chip imports makes the creation of local capacities essential. The planned settlements in Frankfurt, such as the development of a 46 hectare industrial area on the federal highway 12, speak for the desire to continue to promote investment in the region despite the setbacks.

Location factors and future prospects

Although Frankfurt (Oder) has lost the chance for the chip factory, the location factors remain promising. The state of Brandenburg is supporting the development of the site with 13 million euros, and the water supply for the project is considered secure. In addition, wind and solar parks in the area ensure an adequate energy supply.

The city's skills in the semiconductor sector are relevant, as is its proximity to Poland, which offers both labor and sales markets. The Leibniz Institute for Innovative Microelectronics (IHP) in Frankfurt is a recognized research location and strengthens the overall innovation location. Despite the current disappointment, these factors could help attract new investors in the future.

The transfer of the factory from FMC to Magdeburg is another clearly visible turning point in the development of the semiconductor industry in East Germany. However, Frankfurt (Oder) can learn from the situation and take targeted measures to improve the chances for future investments.