In response to the ongoing semiconductor shortage, that has wreaked havoc on the production of everything from cars and appliances to personal computers and power tools, German technology and parts supplier Robert Bosch GmbH will invest another 400 million euros ($467 million) to expand its chip manufacturing facilities. The increased spending will be used to expand operations at the company’s wafer fabrication sites in Dresden and Reutlingen, Germany, as well as its semiconductor component factory in Penang, Malaysia.
The majority of the money will be used to expand production capacity at the company’s Dresden facility, which opened in June at a cost of €1 billion ($1.2 billion), making it the company’s single greatest investment ever. That plant manufactures wafers with a diameter of 300 millimeters, a greater dimension that delivers individual chips per wafer.
In both 2022 and 2023, some 50 million euros will spend in Reutlingen, where the business has been producing semiconductor components since 1970. Bosch will increase the size of its “cleanroom” – a specifically constructed environment where silicon wafers are turned into semiconductor chips – by more than 4,000 square meters (about 43,000 square feet), bringing it to a total of 14,500 square meters (156,000 sq feet). According to Bosch, the expansion would result in the creation of 150 new employments.
Bosch will build a new semiconductor test center in Penang, which will begin operations in 2023. The test center will originally occupy 14,000 square meters (150,696 square feet). However, the business owns the land on the Penang strip — more than 100,000 square meters — and intends to develop it all.
The large investment comes at a time when there has been a long-running semiconductor scarcity, which automotive executives and industry experts expect to continue into next year. In their respective third-quarter results calls this week, executives from Ford Motor Company and General Motors both stated that the shortages would continue through 2022 if not 2023.
It is a smart move for the corporation, which not only sells automakers and other businesses with semiconductors but also utilizes them internally in goods like Bosch power tools. It is also excellent news for the European Union, which wants to strengthen domestic supply chain resilience by producing one-fifth of the world’s supply of semiconductors by 2030.