EuroFocus: Silicon Alps: Vacationland lures high-tech firms
08/01/1999
The Silicon Valley success story has been emulated all over the world, starting in the US with places like Silicon Desert in New Mexico, Silicon Forest in Oregon, and then appearing overseas, with Silicon Glen in Scotland, Silicon Island in Taiwan, and so on. Now, with reasonable justification, the beautiful province of Carinthia in Austria, on the Italian border, is staking claim to the sobriquet "Silicon Alps." With funding from the Austrian government as well as the local government, numerous firms have moved into this bucolic locale lured by the slogan: "Work where others come for vacation."
Unlike most other regional development sites, however, Carinthia would prefer not to attract any giant new semiconductor fabricating plants, or mega fabs. Officials would prefer smaller high-tech infrastructure firms to locate there instead, according to Robert Gattereder, managing director of the state of Carinthia's Center for Technology Development. "We don't need lots of jobs," he explained, "Instead we are encouraging high value-added jobs, with high-skilled workers paid 3- or 4-times more than in typical service industry jobs."
With lakes you can drink from, clean snow-covered peaks, and a low population density, the region would like to preserve its amenities and quality of life while boosting its economic status. It is only about a 20-min drive to the Italian border, and executives there say they can easily drive over to Italy for dinner.
Infineon (the former Siemens Microelectronics) is already located in Villach, Austria, with a design center and semiconductor fab specializing in power and mixed signal devices, especially for the automotive industry, plus chips for smart cards and telecommunications. The fab puts out about 1.5 billion chips/year, and the company employs about 1700 people in the fab and 250 more at the design center.
It took only 60 days, Gattereder boasts, for Siemens to get all the permits it needed to make an investment of over $200 million in new facilities a few years ago.
There are also a growing number of infrastucture firms, including SEZ, which specializes in wafer preparation/cleaning systems, Ortner Cleanrooms, Dolinschek GmbH (cleanroom piping), Mechatronic, Flextronics (CD-ROMs, DVD), Optima Laser (a branch of Philips that makes TV amplifiers and household appliances), ADC Telecommunications, and a wide assortment of other branches of bigger firms or start-ups. There were more than 20 high-tech start-up companies in 1998 that located in the Silicon Alps region.
To push the high-tech build-up, funding is being provided both by Carinthia itself, some $5-6 million over the past 18 months, and by the Austrian government ($30 million in 1998), to provide venture capital, facilities, and educational/training facilities to provide the skills needed for these types of companies. Officials are planning a 5-10 year development program for high-tech companies, with investments totalling about US$40 million a year, according to Gattereder. A Carinthian Tech Research Center was started there in 1987, and ASIC design is taught at the Carinthian TECH Institute.
A package of benefits is offered to firms locating in the region, including R&D funding up to 50%, up to 30% of the funding for start-up companies, incubator centers, and funds for training workers. A single contact organization handles all requests for expansion, and officials boast that permits for new facilities will be issued within 60 days. There is an airport in Klagenfurt, near Villach, and there are 23 fabs located within 350 miles of Villach. There are three major airports within an hour and a half's drive, the closest one being in Zurich, Switzerland.