A crisis changes everything

Mar 1, 1985 | Market News

Will Villach become Europe's memory capital?

In the early 1980s, semiconductor manufacturers expected a steady increase in demand for memory chips, which led to a surge in investment in manufacturing capacity: Between the laying of the foundation stone for H15 and the start of series production of 256k memory chips in Villach in January 1985, around 25 new semiconductor factories went into operation worldwide.

However, the expected demand failed to materialize and the price of memory collapsed. A 256k memory suddenly cost only 5 US dollars instead of 25, and the semiconductor manufacturers of the world reacted by reducing their capacities, accompanied in many companies by waves of layoffs.

Within the Siemens Group, Villach was one of the hardest hit locations, with 535 of 1,400 employees forced into short-time work. Although prices rose again in the same year and the situation eased, site manager Wolfgang Spalek was still convinced that the volatile storage market was not sufficient to secure the Villach site in the long term. His answer: "industrial goods," better known as power semiconductors.

Press Photos