Benzinga | Jun 7, 2021 11:57AM EDT

Bosch Inaugurates $1.2B Factory to Counter Global Semiconductor Chip Shortage

* Robert Bosch GmbH inaugurated a 1 billion-euro ($1.2 billion) factory in Dresden, Germany, to counter the semiconductor chip supply constraints and reduce dependence on Asian or U.S. imports, Bloomberg reports.

* The plant received 200 million euros ($243 million) in state aid under an E.U. investment scheme, Reuters reports. It will start manufacturing power tool chips in July and automotive chips in September.

* The E.U. pledged to produce at least 20% of the global supply on a value basis by the end of the decade.

* Bosch estimates the global semiconductor demand to grow 11% in 2021 to a market volume of over 400 billion euros.

* The factory can produce 300-millimeter silicon substrate wafers with structural widths of up to 65-nm.

* Bosch already manufactures 150 and 200-mm wafers at a Reutlingen factory outside Stuttgart. It will invest around 50 million euros in expanding the site's clean-room facilities for 200-mm wafers in coming months.