German auto supplier Bosch aims to ease the continuous global chip shortage. The problem has been afflicting massive financial damages to some tech companies, particularly those that rely on semiconductors.
To rejuvenate the chip industry, the tech firm will be investing 3 billion euros or $3 billion in 2026 across Europe. This would cover the expansion of plants and development centers in the continent.
Bosch Wants to Bolster Chip Production
(Photo : Jan Böttinger from Unsplash)
The largest auto supplier in Europe will invest $3 billion to help alleviate the ongoing semiconductor shortage globally.
According to Gadgets 360, the multinational tech company is looking forward to alleviating the chip shortage that is currently hitting the semiconductor firms.
The $3 billion investment is said to be enough to lift Europe into the chip business. Bosch wants to improve the region's production capacity right now. The Asian and US-based makers are dominating the global market.
"Europe can and must capitalize on its own strengths in the semiconductor industry. The goal must be to produce chips for the specific needs of European industry," Chief Executive Stefan Hartung said.
In 2021, the power tool manufacturer officially opened a chip plant in Dresden which cost $1 billion. So far, this has been helping Europe to engage in more chip-related ventures and attract many customers worldwide regarding EV production.
In the same year, Bosch mentioned that the chip shortage would push through in 2022. The company highlighted that the supply would remain "very low" for the remainder of 2021. The announcement came after Bosch China only accomplished nearly 20% of the orders for their clients.
In fact, the Gerlingen-headquartered firm expects that bottlenecks will hinder the chip plants when it comes to shipping and production for the next months.
There's a need to ship the semiconductors to Malaysia from the country of origin (Germany). The process will be repeated upon the production kicks off.
Hartung said that there would be some disturbances that would affect the shipping process. The delay in the shipments could extend for weeks until the delivery schedule.
Related Article: Volkswagen, Bosch Agrees to Setup 6 Battery Production Centers in EU by 2030; Is this for Electric Vehicles?
Reasons Behind the Global Chip Shortage
Forbes reports that the surging problem in semiconductor production has led to the unfinished production of vehicles around the world.
Previously, Mercedes-Benz predicted that the chip issue would still happen until 2023.
According to Techradar, the COVID-19 pandemic was to be blamed for the most recent global chip shortage. Since the healthcare crisis does not stop to date, many cities where chip plants are located are forced to undergo long lockdowns.
Aside from that, the grueling stability of cryptocurrencies is also seen to be a driving factor in semiconductor problems. The chipmakers could not keep up anymore with the demand from the cryptominers.
The droughts in Taiwan have impacted the industry, as well. Since many chip producers are located in this country, the natural calamity posed a very huge problem for them when it comes to production.
Other reasons why the chip shortage continues include the Ukraine-Russia conflict, winter storms in the US, and geopolitical tension between China and Uncle Sam.
Read Also: Bosch Chairman Thinks EV Batteries Pollute More Than ICE!
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Written by Joseph Henry
