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Bosch Goes Big on German Chip Production

A Bosch employee checks a semiconductor wafer in yellow light clean room at company’s research and advance development centre Campus in Renningen
Up to 700 people are expected to work in the new plant, checking semiconductor wafers such as this one. Picture source: Reuters

Car parts maker Bosch is preparing to invest up to €1 billion ($1.1 billion) into a new chip production site in Germany’s eastern city of Dresden, according to German media. The move would represent the largest investment in the company’s history, according to news agency dpa.

The factory is expected to produce chips for sensor technology employed in self-driving cars and should create up to 700 new jobs. Bosch, together with carmaker Daimler, had said last year that it wants to be able to sell autonomous cars by 2020.

The so-called micro-electro-mechanical systems, also known under the acronym MEMS, power cameras, radar sensors and laser scanners, which are all crucial in the development of self-driving cars. Since 2013, Bosch has been developing special circuits for the interpretation of MEMS signals. The new plant will be tasked with producing such circuits on a large scale, according to Sächsische Zeitung, a local German newspaper that first reported on the investment.

Bosch declined to comment on the media reports. A joint formal announcement with the federal economy ministry and the state government of Saxony is expected for Monday.

The investment receives significant backing from state funds, according to Sächsische Zeitung. Germany last year vowed to support local semi-conductor producers in the face of heavily subsidized competitors from China and the United States.

The newspaper also reported that Dresden was awarded the contract despite tough competition for the site from New York and Singapore.

The latest investment would be a further sign that Bosch, known as the world’s largest car supplier and a major maker of washing machines and refrigerators, is embracing smart technology in going forward. The company is investing in the development of artificial intelligence and the Internet of Things, branching out into areas such as smart farming. The firm this year pulled its AI experts together into a new research institute and will fund it with €300 million, or $337.7 million, through 2021.

Tina Bellon is an editor with Handelsblatt Global based in New York. To contact the author: T.Bellon@extern.vhb.de

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