How did East German semiconductor manufacturing technology fail?
How Semiconductors Ruined East Germany-YouTube
In the late 1980s, the German Democratic Republic (East Germany) was fully committed to the tremendous task of 'domesticizing semiconductors'. This obsession with semiconductors ends in failure, and the large amount of money spent on it ultimately leads to the bankruptcy of the country's economy.
Throughout the 1950s, East Germany was trying to recover from the war. Although East Germany inherited a strong industrial base from Nazi Germany, it had only one-third the population of West Germany.
The ruling
Throughout its history, East Germany has been faced with the problem of talented and smart people consistently trying to escape to the West. In order to keep such people in East Germany, SED presented a stable future with high technology. As a result, East Germany at the time, even more so than the Soviet Union, turned to information technology as a path to economic dynamism and a bright socialist future.
At the time, the SED elites believed they were in a technological race to decide whether democracy or socialism could build a better society. Walter Ulbricht , the first secretary of the SED at the time, called for an 'industrial transformation' with the ultimate goal of 'catching up with and overtaking capitalism in terms of technology.'
SED believed that a prosperous computer industry was essential to realize this industrial transformation. And to build good computers, East Germany had to learn and master microelectronics technology.
Less than four years after the invention of the germanium transistor in the United States, East Germany began manufacturing its own first-generation semiconductors. Development of the first generation of semiconductors began in 1952 at the plant for electrical components for communication technology in Teltow near Berlin. At this timing, East Germany's semiconductor technology will be almost on par with West Germany. The first semiconductor factory in West Germany was built by Siemens in 1952.
Semiconductor development in East Germany was handled by a small team of about 74 people, led by physicist Matthias Falter. However, the size of this team will grow rapidly to 625 people in the 1960s.
Falter was an excellent physicist, but he did not seem to have the qualities of a team leader or manager, and the development team suffered from a lack of cooperation between industry and academia. One day, a member of the team threw hot ashes out the window of a factory that was conducting trial production of semiconductors. This ash ruined the semiconductor itself, and it seems that the team has developed to the point where they do not know what to expect from subsequent mass production.
Furthermore, East Germany did not give the semiconductor development team the resources it deserved. The administration, especially the chief accountant, had little interest in semiconductors, and there is an episode that the purchase of 'felt slippers' used to prevent static electricity buildup in clean rooms was not approved. The lack of such support seems to be the problem that the East German semiconductor industry encountered early on.
Since East Germany had the aforementioned problems in the early days of semiconductor development, some form of technology transfer was necessary to build a stable development base. And fortunately, the USSR was the world leader in computing technology. However, despite being East Germany's main political backer, the Soviet Union was strangely wary of it.
In 1958, the staff of the development team visited the Soviet Union for technical exchange, but after returning home a year later, the staff complained that 'only limited cooperation was obtained.' The reason is that much of the computing-related technology developed by the Soviet Union at the time was developed for military use. It seems that the Soviet Union was concerned that these technologies would be leaked from scientists who defected to the West by transferring these technologies to East Germany.
Meanwhile, in 1959, General Secretary Ulbricht wrote a letter directly to then Prime Minister
At the time, the United States was the world leader in semiconductor technology, but because semiconductor technology was clearly intended for military applications, Western countries prohibited technology exports to countries associated with the Soviet Union. Ta. This was
However, not all Western countries have adhered to COCOM regulations. In 1959, a ten-man East German delegation visited England to visit a number of semiconductor factories and purchase related equipment. Specifically, through the connections of Arthur Lewis of the British Labor Party, the delegation visited the factories of
The visit to England was a great success, and East Germany learned a lot about industrial-level semiconductor manufacturing. In addition, East Germany succeeded in purchasing low-frequency transistor equipment, which was state-of-the-art at the time. However, despite the success of the technical inspection tour to England, the position of East Germany's semiconductor industry remained unsolidified, and excellent engineers from East Germany continued to flow out to West Germany.
Among them, in 1958, the East German semiconductor development team succeeded in producing 100,000 germanium diodes, transistors, rectifiers, etc. However, approximately 98% of these products were discarded before the end of their lifespan.
On the other hand, in the United States, 27.8 million transistors were produced in the same 1958, and in 1960 the production increased to 131 million. In 1961, Texas Instruments began selling integrated circuits, which had a major impact on the semiconductor industry. With this amazing invention, America greatly extended its technological lead in the semiconductor industry.
In Japan, Sony had already invented the transistor radio '
Erich Appel, head of the East German Central Committee Political Bureau Economic Committee, wrote in late April 1959: 'Compared with the industries of the United States, Japan, and West Germany, our technological backwardness is almost inferred. This backwardness will not decrease until at least 1961, but rather will increase.'
In addition, another inspection in 1960 confirmed even more backwardness in semiconductor production. East German workers at the time tended to rely more on empirical rules than measuring instruments, and the various factory lines did not cooperate with each other.
Also, despite memos submitted to the authorities saying that 'East Germany is five to six years behind in terms of technology,' an analysis submitted to the more politicized Economic Commission found that technology It seems that the delay was shortened to 'about 3 to 4 years'.
Summarizing these analyses, East Germany at that time would be placed in the category of '
By 1960, 3.5 million young people had fled to the West, and East Germany was rapidly aging. East Germany built the Berlin Wall in 1961 after efforts to limit the brain drain failed. The Berlin Wall made it impossible for East Germany to import a small amount of technology that had been imported from the West, so filling in the gaps in technology became an issue.
At first, East Germany approached the Soviet Union, but relations between the two were strained during this period. The Soviet Union criticized East Germany's 'lack of professionalism' and complained that East Germany was 'using East Germany to cover its production shortfall.'
As a result, the Soviet Union became reluctant to supply East Germany with oil and became a drag on the sharing of computer technology. Also, in 1965, East Germany signed an extremely unfavorable trade agreement with the Soviet Union. .
Because of this situation in relations with the Soviet Union, in 1963 East Germany came up with a new concept called the New Economic Planning System. This allowed industrial groups, rather than bureaucrats, to directly determine how the funds were spent.
The initiative also boosted the economic standing of technology sectors such as semiconductor manufacturing, with R&D spending more than tripling between 1959 and 1963. In 1965 nearly 40% of the electronics produced in East Germany were semiconductors.
Four years later, in 1969, the value of semiconductor production quadrupled. Many of these were used in consumer electronic products such as radios, televisions and refrigerators. In 1971, semiconductor production reached DM 535 million. Only this year did East Germany start producing integrated circuits.
In other words, it can be said that Ulbricht's reform achieved a certain degree of success. However, that too came to a standstill in the late 1960s. A bizarre inequality in policy planning meant that while color TV was widespread, consumer goods like toothbrushes and toilet paper were in short supply.
In 1971, Erich
In addition, 'Spies and
The Ministry of State Security, known as the Stasi, has been engaged in scientific and technical espionage since the 1950s, moving from 'acquisition of scientific knowledge' to 'acquisition of specific technology.' Most of the technology acquired by the Stasi was through 'Western informants'.
One of the people who informed the Stasi was physicist Hans Roeder, who worked for Telefunken and AEG in West Germany. For over 28 years, Rader leaked technical secrets to East Germany, but was never caught by the West.
Stasi gave the list of materials he wanted to Radar, and when Radar got it, it is said that he handed it to Stasi at Friedrichstrasse Station, the only station in East Berlin where the West Berlin subway passes. Once new information was obtained, the Stasi laundered the technology, stripped it of its labels and made it unidentifiable where it came from, and then sent it to an East German company.
In the late 1960s, the socialist bloc copied
After the fall of the Berlin Wall, the Stasi destroyed most of its foreign records, so it is not possible to know how effective its acquisition of foreign technology was. However, it is thought that technology theft by East Germany led to savings in East Germany's research and development costs of hundreds of billions of yen, contributing to significantly filling the gap with Western countries.
But it is also clear that East German industry had a hard time absorbing the stolen information. Since the Stasi was not a technical expert but a mere spy, it seems that there were frequent cases of stealing the wrong things.
In addition, the tightening of embargoes from the West also hindered the industrial development of East Germany. And it seems that the products of the Western countries stolen by the Stasi gradually became outdated, and the cost to obtain them also increased.
The embargo has made it easier for Western countries to deceive the Stasi, and it seems that the product price has increased from 30% to 80% and then to 100%. It seems that the price increase of such products also led to pressure on the research and development budget of East Germany.
And with the development of technology, semiconductors that are difficult for East German engineers to replicate will appear. In 1976, it seems that it was difficult to know the secret of the manufacturing method from the physical shape of the integrated circuit.
The 1970s were a difficult time for East Germany, with tightening export bans, oil crises, heavy borrowing from the West, declining productivity and declining competitiveness. Gerhard Schuler of the National Planning Commission persuaded Honecker that investments in semiconductors would save the country from economic stagnation.
In 1981, East Germany was still seven to ten years behind Western countries in the development of microelectronics, so Honecker announced plans to produce most of its semiconductors domestically by 1985.
However, this realistic techno-economic view gradually came to be seen as ``semiconductors as a prerequisite for the transition to communism,'' and changed to a magical way of thinking to counter imperialism from the West. It eventually turned into a toxic obsession.
With East Germany's scarce financial resources at the time and the COCOM export embargo still in place, the country went deeper into espionage and espionage to steal Western technology.
In 1985, Gerhard Ronneberger, one of the greatest spies in Stasi history, successfully signed a surprising technology transfer agreement with Toshiba. For 25,000,000 marks, it offered East Germany blueprints for a 256KB memory chip and a method for manufacturing it.
This was an epoch-making contract, but in 1987 it was discovered that Toshiba had sold submarine propeller equipment to the Soviet Union. Fearing that the contract with East Germany would be exposed, Toshiba demanded a 95% refund from the Stasi in order to destroy evidence. Ronneberger agreed, and in July 1988, in front of Toshiba employees, he put the blueprints of the chip in a bucket of acid to dissolve it. However, it seems that Ronneberger discarded the copied blueprint.
Despite these efforts, East Germany was still technologically behind the West. By 1987, the United States had 215 computer-aided design and manufacturing systems per 1,000 employees, and West Germany had 111. In contrast, in the case of East Germany, it seems that there were only 8 computer-aided design and manufacturing systems per 1,000 employees.
In 1986, the East German government launched a program called 'Best Integration' with the goal of developing
This accounted for 20% of East Germany's total R&D budget at the time, putting pressure on the country's already heavily indebted finances. At the time, 400,000 people in East Germany were engaged in microelectronics manufacturing, research and development, and support, which means that 1 in 8 of the industrial population was involved in some form of semiconductor manufacturing. .
'Best integration' consists of several programs, for example, a state-owned company was ordered to 'develop the same 32-bit microprocessor as Intel developed by 1990.'
Other companies have been mandated to develop 256KB and 1 Mbit memory chips. This company succeeded in developing a 256KB memory chip in 1987 earlier than planned, but could not mass-produce it. However, in September 1988 another company succeeded in showing off the first sample of 1 megabit memory chip '
Honecker referred to this as 'convincing evidence that the German Democratic Republic maintains its status as an industrialized country.'
However, after all, East German companies could not mass-produce semiconductors, and Dresden could produce only 35,000 chips from 1988 to 1989, with a yield of only 20%. Toshiba produced this number of chips in just one day.
Furthermore, in November 1988, Toshiba started mass shipment of 4 megabit DRAM. Announced that by March 1989, the monthly production volume will be expanded to 1 million units. Meanwhile, the East German economy was in shambles at the time, and by the early 1990s was expected to default on its debt.
Then, in May 1989, Hungary opened its borders with Austria, allowing East Germans to pass through Hungary on their way to West Germany. And in November 1989, the Berlin Wall fell.
Although East German semiconductor production has come to a technical dead end, its social legacy lives on. With billions of marks invested in Dresden, Dresden is now one of Europe's leading silicon producing regions. Also, on Tuesday, August 8, 2023, TSMC, the world's largest semiconductor foundry, has announced
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