Bosch Announces $1.2 Billion Chip Plant as the Crisis Keeps Wreaking Havoc

However, the new plant located in Dresden will initially build chips for Bosch power tools, with the production for the automotive industry projected to begin in September. However, the factory kicks off operations six months earlier than planned, and without a doubt, this is good news, especially as the world is struggling with the lack of chips.

The $1.2 billion investment was backed by $243 million in state aid, with Bosch explaining that it will employ 700 people when work on the facility is complete. Some 250 people are already working at the plant, the company revealed.

The automotive market has been having a hard time dealing with the semiconductor shortage, as several carmakers turned to temporary production halts as they were waiting for suppliers to deliver more chips.

General Motors, however, revealed recently that the lack of semiconductors is easing up, with the company already increasing shipments of certain models to dealers across the United States and Canada.

But GM, too, said the crisis wouldn’t come to an end too soon, acknowledging that some factories will continue to struggle with the shortage, though for now, no other production halts are said to come into effect.

“Production at certain manufacturing facilities in North America, Asia and South America will continue to be impacted by the global semiconductor shortage through June and July,” GM said.

Research estimates that the production of approximately 4 million cars could end up being affected by the semiconductor shortage. However, the number could grow by the end of the year as some foundries are forced to slow down their manufacturing operations due to new restrictions imposed by the local governments as part of the health crisis.