Bosch to spend €3bn on European fabs

Bosch to spend €3bn on European fabs

Business news |
By Nick Flaherty

Bosch plans to invest another €3bn in its semiconductor division by 2026 as part of the proposed European IPCEI programme on microelectronics and communications technology.

This will include 300mm wafer capacity for its MEMS devices and 1200V gallium nitride (GaN) devices for automotive.

“Microelectronics is the future and is vital to the success of all areas of Bosch business. With it, we hold a master key to tomorrow’s mobility, the internet of things,” said Dr. Stefan Hartung, chairman of the Bosch board of management.

One of the projects Bosch plans to fund with this investment is the construction of two new development centres – in Reutlingen and Dresden – at a combined cost of over 170 million euros. In addition, the company will spend 250 million euros over the coming year on the creation of an extra 3,000 square meters of clean-room space at its wafer fab in Dresden. “We’re gearing up for continued growth in demand for semiconductors – also for the benefit of our customers,” Hartung said. “For us, these miniature components mean big business.”

This comes as France and Germany are positioning to drive funding for the newly launched IPCEI on Microelectronics and Communication Technology. This is intended primarily to promote research and innovation, although the funding has yet to be agreed.

The investment also aims to tap into funding from the European Union and German federal government under the European Chips Act to develop a robust ecosystem for the European microelectronics industry. The objective is to double Europe’s slice of global semiconductor production from 10 to 20 percent by the end of the decade.

“Europe can and must capitalize on its own strengths in the semiconductor industry,” said Hartung. “More than ever, the goal must be to produce chips for the specific needs of European industry. And that means not only chips at the bottom end of the nanoscale.”

This new investment in microelectronics also opens up new areas of innovation for Bosch, including system-on-a-chip devices such as the radar sensors for automated driving. It is also working to further modify its own microelectromechanical systems (MEMS) specifically for the consumer goods industry.

One of the things company researchers are currently using this technology to develop is a new projection module that can be built into the temple of a pair of smart glasses.

“In order to cement our leading market position in MEMS technology, we also plan to manufacture our MEMS sensors on 300mm wafers,” Hartung said. “Production is scheduled to start in 2026. Our new wafer fab gives us the opportunity to scale production – an advantage we intend to exploit to the full.”

The Reutlingen plant has been mass-producing silicon carbide (SiC) chips since the end of 2021 for electric and hybrid vehicles, where they have already helped boost operating ranges by up to 6 percent.

With annual growth rates of 30 percent or more, demand for SiC chips remains high, meaning full order books for Bosch. In a bid to make these power electronics more affordable and more efficient, Bosch is exploring the use of other types of chips as well.

“We’re also looking into the development of chips based on gallium nitride for electromobility applications,” Hartung said. “These chips are already found in laptop and smartphone chargers.” Before they can be used in vehicles, they will have to become more robust and able to withstand substantially higher voltages of up to 1200 volts. “Challenges like these are all part of the job for Bosch engineers. Our strength is that we’ve been familiar with microelectronics for a long time – and we know our way around cars just as well.”

Bosch points to its €1bn investment in the 300mm fab in Dresden, which opened in June 2021. The semiconductor centre in Reutlingen is also being systematically expanded: between now and 2025, Bosch is to invest around €400m in the expansion of manufacturing capacity and the conversion of existing factory space into new clean-room space. This includes construction of a new extension in Reutlingen, which will create an additional 3,600 square meters of ultramodern clean-room space. All in all, clean-room space in Reutlingen is set to grow from around 35,000 square meters at present to over 44,000 square meters by the end of 2025.

Bosch is also building a new test centre for semiconductors in Penang, Malaysia, that will open in 2023 to test finished semiconductor chips and sensors.

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