Motorola, Siemens to Build Large Chip Plant

Motorola Inc. and Siemens are forming a joint venture to manufacture computer chips in Dresden, Germany, the German government said Wednesday. The $1.6-billion semiconductor plant would be Europe’s largest.

The venture comes after the companies began construction last year on a U.S. plant that will make 64-bit memory chips for personal computers. The German government will contribute $105 million through 2001 to the Dresden effort, with the companies investing significantly more, said Juergen Ruettgers, minister for training, science, research and technology. Neither company commented on their plans.

Motorola will be the third big chip maker to locate in Dresden, bolstering the city’s growing reputation as “Germany’s Silicon Valley.” Munich-based Siemens opened a plant in Dresden in 1995 and Advanced Micro Devices Inc. is building plant there that the German government values at $1.6 billion.

“There’s a talented labor force and low wages,” said Rick Berry, an analyst at Atlanta-based Argent Securities. He said that the high unemployment rate in the eastern German city also indicates a large available work force.

The venture is expected to create as many as 13,000 full- and part-time jobs, Ruettgers said. While Germany’s overall unemployment rate is a record 11.8%, the jobless rate in the former East Germany is 18.3%.

Shares of Schaumburg, Ill.-based Motorola rose 6 cents to close at $57.19 on the New York Stock Exchange.