Facing Urgent Demands, Bosch Adds Capacity for Chips

Bosch is ramping up its semiconductor production capacity with a huge additional investment in response to the continuing global chip shortage.

While the Tier 1 supplier had previously avoided prioritizing chip production for the automotive industry (See: Bosch Opens Chip Plant; Automotive Has to Wait) over those produced for its consumer electronics and power tool products at its new wafer fabrication site in Dresden, Germany, it now specifically refers to the urgent requirements called for by automakers.

In a company statement, Bosch says modern electronics has become vital in cars for reducing vehicle emissions, preventing road accidents and increasing powertrain efficiency.

“Bosch can draw on its specific semiconductor and automotive expertise to develop superior electronic systems,” says Harald Kroeger, member of the board of management of Robert Bosch GmbH.

“This benefits our customers and the countless people who want to continue to enjoy safe and efficient mobility in the future.”

Now the company is increasing its capital expenditure from €50 million ($59 million) already invested this year to a total of €400 million ($471 million) in expanding its wafer fab plants over the next couple of years in both of its Germany plants, in Dresden and Reutlingen, and in its semiconductor operations in Penang, Malaysia.

Most of the new spending is earmarked for Dresden, where manufacturing capacity is to be expanded even faster in 2022.

About €50 million will be spent in the coming year on the wafer fab plant in Reutlingen, near Stuttgart, and a total of €150 million ($177 million) in additional clean-room space there from 2021 to 2023.

In Malaysia, Bosch is building a test center for semiconductors from scratch. Starting in 2023, the Penang center will test finished semiconductor chips and sensors.

“Demand for chips is continuing to grow at breakneck speed,” says Volkmar Denner, Bosch’s chairman of the board of management. “In light of current developments, we are systematically expanding our semiconductor production so we can provide our customers with the best possible support.

“These planned investments demonstrate once again the strategic importance of having our own manufacturing capacity for the core technology of semiconductors.”

— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_

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