German technology firm Bosch on Monday opened a 1 billion euro ($1.2 billion) chip factory in the southern city of Dresden to help meet the growing need for semiconductors.

A global shortage of semiconductors has forced major auto companies such as Volkswagen and BMW to impede automobile production in recent months.

“Bottlenecks on the semiconductor market have made the economic recovery after the coronavirus catastrophe harder,” German Chancellor Angela Merkel said in the opening ceremony.

Speaking by video link from Berlin, she suggested that computer chips have altered oil as the”life blood” of markets.

Bosch, a major supplier to the automobile industry, said the factory is the biggest single investment in its own 130-year history. It will employ 700 people to produce silicon wafers comprising tens of thousands of chips which will control its airbags, braking and parking management systems.