Both Siemens and Motorola have confirmed they are to build a chip manufacturing plant in Dresden which will produce 12 inch wafers.
The companies chose Dresden - formerly in East Germany - because it receives Federal German Republic funding and has a prestigious university nearby.
Microprocessor manufacturer Advanced Microprocessor Devices (AMD) is also building an advanced fabrication plant nearby.
The plant will produce memory, giving the lie to recent reports that that market is drying up.
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