Bosch opens €1bn Dresden chip plant, Merkel urges "catch-up"
Engineering and tech giant Bosch has opened its €1 billion semiconductor plant in Dresden, Germany, marking a record investment by the company as it aims to take its place in the rapidly growing electric vehicle value chain and battle the ongoing global chip shortage.
The plant will start producing semiconductors for Bosch power tools in July - six months ahead of schedule - and production for the automotive sector is scheduled to start in September.
Speaking during the opening ceremony via video link, German Chancellor Angela Merkel said the facility would act as a boost for European efforts to rely less heavily on Asian semiconductor companies at a time of worldwide shortages.
Domestically-produced chips would "make Germany and Europe not just more crisis-proof, but also create new opportunities for growth," Merkel said.
Read more: Bosch eyes June opening for new semiconductor plant in Dresden
The highly-automated €1.2 billion factory is Bosch's largest-ever investment in the company's 130-year history. The government in Berlin contributed €140 million to the project.
Dresden, the capital of the Saxony state, was chosen due to its burgeoning status as a hi-tech hub, dubbed in Germany as "Silicon Saxony".
Merkel has made repeated comments in recent months, lamenting the European dependence on foreign-made semiconductors. During her comments at the opening, she described the current bottlenecks as "weighing on the economic recovery".
A surge in demand for home electronics during the lockdowns of 2020 has led to a shortage of global computer chip supplies, which are used in a range of consumer goods from electric vehicles to games consoles to smartphones.
Read more: The semiconductor shortage may last into 2022
Merkel added that even without the pandemic, the Internet of Things and Industry 4.0 was always going to inevitably boost demand for semiconductors.
If Europe wanted "to have a say" in the growing market, "we need to catch up to Asia and the United States", she said.
"We have to be ambitious. Our competitors around the world aren't sleeping."
Also addressing the ceremony via video link was European Commission competition chief Margrethe Vestager, who said that the new Bosch factory would "strengthen Europe's competitiveness as a cradle for cutting-edge innovations".
"The state-of-the-art technology in Bosch's new semiconductor factory in Dresden shows what outstanding results can be achieved when industry and government join forces," she told attendees.
She also reiterated the EU's goal to produce 20% of the world's semiconductors by the end of the decade.
Read more: EU's semiconductor plan "doomed to fail", says think tank
Bosch's smart factory is set to produce advanced 300-millimetre semiconductor wafers, making heavy use of artificial intelligence for data analysis, the company said.
During the opening ceremony, Dr Volkmar Denner, chairman of the board of management at Bosch said that with AI, the company was "taking production to the next level".
"In our Dresden plant, we will in the future be relying on solutions provided by the Bosch Center for Artificial Intelligence: at an early stage, our AI-based systems can detect anomalies and malfunctions in the manufacturing process, make learning curves faster, and constantly enhance quality. AI is also used in production scheduling, where it saves time and money as it guides the wafers through as many as 700 process steps at some 100 machines," he said.
The production of chips for the automotive sector is set to commence in September, three months ahead of schedule.
Automakers have been hit especially hard by the shortages of semiconductors and several giants of the industry, such as Toyota and Volkswagen have been forced to cut back production, or even temporarily close factories this year as a result.
Read more: Toyota closes Japanese plants due to chip shortage
Jens Fabrowsky, executive vice president of Bosch's automotive electronics unit, said the new Dresden plant alone would not solve Europe's lack of semiconductors.
"But in a tense situation, every part helps," he told AFP.
Back to Homepage
Back to Technology & Innovation