Technology group Bosch will invest EUR 3 billion in chip production by 2026, including in opening two new development centres and expanding its wafer factory in Dresden, the company said on Wednesday.
The investment, for which Bosch will seek European Union
funding under the Important Projects of Common European Interests (IPCEI)
framework, should boost Europe's production capacity for chips in a global
market still dominated by US and Asian players.
"Europe can and must capitalise on its own strengths in
the semiconductor industry," said Chief Executive Stefan Hartung.
"The goal must be to produce chips for the specific needs of European
industry."
Bosch last year opened a EUR 1 billion chip factory in
Dresden, a record investment as it sought to stake its claim in the growing
market for chips to equip self-driving and electric cars amid a global
shortage.
A total of EUR 170 million will go into the new development
centres in Reutlingen and Dresden, with EUR 250 million to be spent on
expanding the existing Dresden site.
How the remaining funds will be spent is yet to be decided,
Hartung said.
The CEO expects bottlenecks in chip supply, from strained
shipping networks to low production capacity, to continue for several more
months, even as inflation eases pressure on some parts of the sector by
reducing demand for expensive consumer goods.
Bosch's chips need to be shipped from Germany to Malaysia
and back again in the production process, meaning any disturbance to shipping
could add weeks to delivery times, Hartung said.
"There are areas where certainly demand will fall such
that you can order substantive sums at any time.... there are however also
areas where not as much capacity was added and demand is still very high,"
he said. © Reuters
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