German Manufacturer Finds A Way To Curb Electronics And Cars Prices

German manufacturer Bosch has opened a semiconductor chip factory. The new facility is seen as a way to help Europe and the world overcome a global shortage of chips, Bloomberg says.

The factory is located near Dresden, Germany. It cost Bosch $1.2 billion to launch its own lines for chip production. The initiative by one of the electronics flagships will help curb rising prices for appliances and cars, fueled by a shortage of semiconductor components. The plant will ease European companies’ dependence on imports from East Asia, where about 75 per cent of the world’s chip-making capacity is concentrated.

The first chips for power tools will be available as early as July. The capacity will be built gradually, company board member Harald Kroeger said June 7 at the opening ceremony.

Bosch has received some €140 million from the German Federal Ministry of Economics and Energy to build the plant. The company expects demand for semiconductors to grow by 11 percent in 2021. The new facility in Dresden will supply the world with chips.

Microchip supply problems have affected many industries because of the hyper-demand for electronics in the pandemic. Consulting firm AlixPartners said May 13 that a global shortage of semiconductor chips would cut vehicle output by 3.9 million in 2021, a loss estimated at $110 billion for manufacturers.


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