Bosch to spend €400m on chip production

Bosch to spend €400m on chip production

Business news |
By Nick Flaherty

The announcement comes a few weeks after the official opening of its 300mm wafer fab in Dresden where it is already producing chips for power tools and automobiles and will see an acceleration of chip production to try to meet the chip shortage.

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

Most of the capital expenditure is earmarked for Bosch’s Dresden fab. Around €50 million will be spent at the 200mm wafer fab in Reutlingen, near Stuttgart as part of a €150 million project to create additional clean-room space there that runs from 2021 to 2023.

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

“Our aim is to ramp up production of chips in Dresden earlier than planned and at the same time expand clean-room capacity in Reutlingen. Every additional chip we produce will help in the current situation,” said Harald Kroeger, member of the board of management, in a statement. Kroeger was referring to the chip shortage that has affected many sectors but consumer and automotive electronics in particular. Many factories have been enduring a series of enforced shutdowns or slow working due to shortages of electronic components.

Bosch plans to add more than 4,000 square meters of clean-room space in Reutlingen in two stages. The first stage, adding 1,000 square meters of production area for 200mm-diameter wafers to bring the total to 11,500 square meters, has already been completed. This involved converting office space into a clean room over recent months and connecting it to the existing wafer fab via a bridge. The new facility has been producing wafers since September.

“We’ve already expanded our manufacturing capacity for 200mm wafers by some 10 percent,” Kroeger says. The capital outlay for this came to €50 million (in 2021). In making this move, the company is responding in particular to increased demand for MEMS sensors and silicon-carbide power semiconductors. The second stage of the expansion will create a further 3,000 square meters of clean-room space by the end of 2023. To this end, the company will invest some 50 million euros in both 2022 and 2023. Bosch is also creating 150 new jobs in semiconductor development at its Reutlingen location.

In Penang, Bosch has more than 100,000 square meters of land available that will be developed in stages. Initially, the test center will cover an area of around 14,000 square meters – including clean rooms, office space, research and development, and training facilities for up to 400 associates. Earthworks for the new location started at the end of 2020, and work on the buildings began in May 2021. The test center is scheduled to start operations in 2023. The additional testing capacity in Penang is intended to open up the possibility of locating new technologies in Bosch’s wafer fabs in the future.

Bosch said that its 300mm wafer fab in Dresden started production manufacturing six months earlier than planned in July and that production of automotive chips started in September, three months earlier than planned.

Bosch said it has spend that since 200mm production was introduced in 2010 it has spent €2.5 billion in capital expenditure on its wafer fabs in Reutlingen and Dresden. This is in addition to billions of euros on R&D to develop manufacturing processes and on circuit development.

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