Reports from this week suggest that Technology group Bosch is set to make an investment of 3 billion euros ($3.01 billion) by 2026 in chip production. Essentially, this would also include the opening of two more new developments centres. Along with it, the expansion of its wafer factory situated in Dresden. The company specified these aspects on Wednesday, July 13.
Bosch will reportedly seek European Union funding for the investment under the IPCEI- Important Projects of Common European Interests. Clearly, the investment would boost the producing capacity of Europe for chips in a global market. As we know, players from the US and Asia still dominate the global market for chip production.
Stefan Hartung, the Chief Executive Officer of Bosch gave a statement regarding the company’s plan. He stated that Europe has the ability, hence it ‘must capitalise’ on the continent’s own strengths in the thriving industry of semiconductor. Moreover, he stated how the aim for them must be the production of chips for the particular needs of the industry based in Europe.
“Europe can and must capitalize on its own strengths in the semiconductor industry,” he said. “The goal must be to produce chips for the specific needs of European industry.”
Last year, the tech group went on to open a chip factory worth 1 billion euro in Dresden. Evidently, this came forward as a record investment as it was visibly seeking to stake its claim in the thriving market for chips. Mainly, this was to equip self driving and electric vehicles at the time of an intense global shortage. In total, a sum of 170 million is set to go into the new development centres in Dresden and Reutlingen. Along with it, a sum of 250 million euros kept for spending on the expansion of the Dresden site that already exists.
The CEO clarified how the company has not yet decided as to how the rest of the fund would be spent. Hartung is expecting bottleneck in supply of chips, from strained shipping networks leading to low production capacity. This is set to go on for the coming months despite inflation easing pressure on certain aspects of the sector through the reduction of demand for expensive consumer products.
According to Hartung, the chips of Bosch require being shipped from Germany to Malaysia, and back again in the process of production. This indicates that any disturbance during shipping could increase delivery times by weeks. Further, he stated how demand will definitely fall in certain areas such that one can order ‘substantive sums at any time.’ He added how there would also be areas where this much capacity ‘was not added’ and the demand is visibly quite high.