The German state contributed EUR 200 million to the construction of the plant as part of the European Union’s investment framework.
German technology giant Bosch opened a billion-euro chip-focused semiconductor plant in Dresden, Germany, on Monday, according to Reuters.
This is the largest investment in the history of the 134-year-old company.
The new semiconductor plant focuses on the manufacture of asic integrated circuits, i.e. application-specific integrated circuits. They are designed to perform a single task, in the case of Bosch, for example, to activate the car’s automatic braking system.
The factory production will be the first to start manufacturing chips for use in power tools. In September, operations will expand to chips used in car parts.
Chips are semiconductor components made of silicon wafers that are used, for example, in telephones, computers, home appliances, and automobiles.
Bosch’s main business areas are automotive technology, consumer electronics, tools, industrial and construction technology, and packaging technology.
Boschin the plant will start production in a situation where the automotive industry, like many other technology industries, is in pain due to a global chip shortage.
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However, the decision to invest in the new plant was made as early as 2017.
An expert from market research firm Strategy Analytics interviewed by Reuters Asif Anwarin according to the plant, there may be some benefits for Bosch and its customers.
“However, it is unlikely that it will be able to fill the gaps that the entire automotive industry is currently struggling with,” Anwar points out.
The Bosch plant does not plan to produce microcontrollers, for example, the lack of which has forced many car manufacturers to suspend production.
“Every chip we make in Dresden is one missing chip less,” said a Bosch board member interviewed by Reuters Harald Kröger.
Boschin did not have to pay its record investment all alone. The German state contributed EUR 200 million to the construction of the plant as part of the European Union’s investment framework.
Reuters said on Tuesday that the EU aims to capture one-fifth of the world’s semiconductor market by 2030