German technology group Bosch said on Monday it would open an automotive chip factory in Dresden in June to build on its leadership in sensor chips that will boost the electric car industry.
The €1-billion plant will produce sensor chips to be installed in electric and hybrid electric vehicles. The chips help increase the range of electric vehicles.
Bosch began testing the fully automated production of prototype chips, a step towards starting full-scale production at the end of the year, it said.
The plant will not produce the kind of semiconductor chips now in short supply, causing disruptions to the global car industry.
The factory, partly financed by the Free State of Saxony and federal government in Berlin, will employ 700 people. Plans for the plant were announced in 2017.
The local and federal governments want to make Dresden a centre for semiconductor research and manufacturing.