Bosch bolsters ‘Silicone Saxony’ with €1 billion semiconductor factory in Dresden

Bosch has opened an artificial intelligence-controlled ‘water fab’ to manufacture semiconductors, with the first chips for Bosch’s power tools division rolling off the production line in July – six months ahead of schedule.

The aptly timed opening comes as a global semiconductor shortage has called a temporary halt to production lines in automotive.

For automotive customers, chip production will start in September, three months earlier than planned

At roughly one billion euros, the new manufacturing facility is the biggest single investment in Bosch’s more than 130-year history.

The Dresden ‘water fab’ opening has bolstered Saxony’s reputation as a microelectrics hub, reportedly the fifth biggest worldwide, leading the area to be dubbed ‘Silicone Saxony’.

“The state-of-the-art technology showcased at the new Dresden wafer fab is a great example of what public and private European actors can achieve when they join their efforts,” said Margrethe Vestager, EU Commission Vice-President. “Semiconductors will contribute to the development of industries like transportation, manufacturing, clean energy, and healthcare –where Europe excels. It will help strengthen Europe’s competitiveness as a cradle for cutting-edge innovations.”

Dr. Volkmar Denner, chairman of the board of management of Robert Bosch GmbH, added: “For Bosch, semiconductors are a core technology, and it is strategically important to develop and manufacture them ourselves. In Dresden, with the help of artificial intelligence, we will take semiconductor manufacturing to the next level. This is our first AIoT factory: fully connected, data-driven, and self-optimizing right from the start.”

The rise of the semiconductor

In the shape of microchips, semiconductors are to be found in nearly every technical device – in smartphone, televisions, and fitness bracelets and ever more integral in cars. According to Bosch, in 2016, every new vehicle worldwide had an average of more than nine Bosch chips on board, in devices such as the airbag control unit, the braking system, and the park assist system. In 2019, this figure was already more than 17. In the years to come, experts expect to see the strongest growth in driver assistance systems, infotainment, and the electrification of the powertrain. With its wafer fab in Dresden, Bosch is responding to the increased demand for semiconductors.

“Semiconductors are the building blocks of progress. Electronic components equipped with chips from Dresden will make applications such as automated and resource-conserving driving possible, as well as the best possible occupant protection,” said Harald Kroeger, member of the board of management of Robert Bosch GmbH. Surveys confirm this growth in demand: as recently as 1998, according to the ZVEI, the value of the microelectronics in a new car was 120 euros. By 2018, this value had risen to 500 euros, and in 2023 it is expected to exceed 600 euros. This means that semiconductors are a growth area for Bosch as well.

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