Bosch opens $1.2 billion chip plant in Germany, Germany technology and parts supplier Robert Bosch opened a €1 billion ($1.2 billion) chip factory in Dresden, Germany on Monday, the only largest investment within the company’s history. The plant, which can mainly supply automotive customers, may be a major signal that connected and electric vehicles are here to remain.

“Regardless of which powertrain we mention … always we’d like a semiconductor and sensor,” Bosch’s executive vice-chairman of automotive electronics Jens Fabrowsky told TechCrunch.

The plant will handle front-of-the-line processing, or wafer fabrication, within the semiconductor manufacturing process. The 300-millimeter wafers are going to be sent to partners, typically in Asia, to try to packaging and assembly the semiconductors.

300 millimeters may be a “new field of technology,” Fabrowsky explained. As against the 150- or 200-millimeter wafers that are produced at Bosch’s nearby factory in Reutlingen, Germany, the larger wafer size offers greater economies of scale because you’ll produce more individual chips per wafer.

The 77,500-square-foot plant will run on what Bosch calls “AIoT,” a term that mixes AI and the Internet of Things to denote a totally connected and data-driven system that’s unique to the power. Bosch won’t only have real-time data on the approximately 100 machines, but also on the facility, water, and other aspects of the power — up to 500 pages of knowledge per second, Fabrowsky said. The AI-driven algorithm should detect an anomaly from any of the connected sensors immediately.

Despite its high levels of automation, the plant will employ around 700 people once it’s fully operational.

It is unclear whether the plant will help resolve the continued global semiconductor shortage, which has forced automakers like General Motors and Ford to slash production volumes and temporarily shutter manufacturing facilities.

“At the purpose, once we decided [to build the plant] it had been purely driven by technology,” Fabrowsky said. “It was clear we would have liked to travel into 300 [millimeters], and that we needed to take a position in some more capacity.”

The facility will begin production in July with chips for power tools before beginning production on automotive chips in September. It generally takes over 20 weeks to form a semiconductor chip, Fabrowsky said, including 600 individual steps within the wafer facility alone.

The company also will be investing €50 million ($61 million) to increase the white room facilities at its Reutlingen plant, Bosch member Harald Kroeger said at a media briefing Monday.

Bosch opens $1.2 billion chip plant in Germany, Bosch has applied to Germany’s Federal Ministry for Economic Affairs and Energy under a microelectronics investment program to subsidize expenditures for the plant of up to €200 million ($244 million). It must submit evidence of expenditures before it receives the funds, a Bosch spokesperson told TechCrunch.

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