Robert Bosch GmbH spent 1 billion euros ($1.2 billion) to open a chip factory in Germany to ease global chip shortage.

The move also signals that Europe will take broader measures to get rid of dependence on chip imports from Asia or the United States, according to Bloomberg.

The first chips manufactured at the plant near the Germany city of Dresden will be used in electric tools next month, and output for auto parts has been accelerated by three months to September, Bosch said Monday ahead of the site’s opening ceremony.

Bosch’s Dresden factory will supply customers worldwide, Bosch board member Harald Kroeger said. The closely held German engineering giant expects global demand for semiconductors to rise 11% this year to a market volume of more than 400 billion euros.

“It’s extremely important for Europe to create a counterbalance” to the currently dominant position of Asian chipmakers, Kroeger said, because semiconductor components run critical functions in cars. Sophisticated driver-assistance systems, infotainment features and electric powertrains are expected to proliferate in the coming years.

Source: https://www.bloomberg.com/news/articles/2021-06-07/bosch-opens-german-chip-factory-to-help-relieve-global-shortage