German industry has a strong position in global semiconductor production chains, but lags behind in the use of high-tech in its domestic market. This is shown by a study by the ifo Institute, cited by Reuters.
According to the analysis, the German semiconductor industry reaches about one-seventh the size of the US one, if its contribution to meeting global consumer and investment demand is measured along the entire value chain. However, the majority of this contribution is realized outside Germany.
In the production of machinery and motor vehicles, the global contribution of German industry is more than five times greater than its contribution to domestic demand. In information technology, the difference is even greater. The data shows that German companies are involved in international technology chains, but the country is not creating enough demand for the same products and services at home.
Germany is slower to adopt artificial intelligence
About 75% of the world's high-performance computing capacity is located in the United States, while Germany has only a small fraction of it. This increases the German economy's dependence on American digital infrastructure.
According to Eurostat data, just over 26% of companies in Germany used artificial intelligence in 2025. This puts the country in ninth place in the European Union in this indicator.
“The spread of modern data-driven technologies such as artificial intelligence is progressing slowly in Germany“, says ifo expert Anita Wolf.She points out that clear rules with low administrative burden for data protection and use can help development. She said it was also necessary to strengthen startups and the venture capital market, which remains underdeveloped in Germany.
Strong industry, but insufficient domestic demand
The study outlines a gap between Germany's international specialization and the technological capacity that is used domestically. German industry continues to be important for the global production of machinery, cars and technological components, but the development of high-tech solutions depends largely on foreign markets.
The analysis indicates that weaker domestic demand for high-tech products is also limiting demand for semiconductors. This could hinder the growth of the sector if companies do not receive stronger incentives to implement artificial intelligence and other data-driven technologies.