Robert Bosch GmbH, a German parts and technology supplier, will invest an additional 400 million euros ($467million) in its chip manufacturing plants to address the continuing semiconductor shortage. This is to help produce everything from cars and appliances to computers and power tools.
The company's Wafer Fabrication Plants in Dresden and Reutlingen in Germany and its Penang semiconductor component plant in Malaysia will benefit from the increased expenditure. The company's Dresden facility, which was opened in June at a total cost of 1 billion dollars ($1.2 billion), is the largest investment it has ever made. This facility produces wafers of 300 millimeters in size, which allows for more chips per wafer.
In 2022 and 2023, around 50 million euros will go to Reutlingen. The company is a pioneer in the production of semiconductor components. Bosch will increase the area of its cleanroom, a specially designed environment in which silicon wafers are processed into semiconductor chips, by more than 43,000 square meters (43,000 sq. ft.). This will bring it to 14,500 square metres (156,000 sq. ft. According to Bosch, the expansion will create 150 new jobs.
Bosch will build a new semiconductor testing center in Penang. It will be operational by 2023. Initially, the test center will cover approximately 14,000 square metres (150,696 square feet). The company does have more than 100,000 square metres of space on the Penang strip and plans to develop it all.
This huge investment is made during a prolonged semiconductor shortage, which automotive executives and industry analysts predict will continue into next year. General Motors and Ford Motor Company executives told investors during their third quarter earnings calls that they expect the shortages to continue into 2022 and possibly 2023.
This is a smart move by the company which supplies automakers as well as other companies and uses its chips in-house to make products like Bosch power tools. It's also good news to the European Union. The EU aims to improve domestic supply chain resilience by increasing the production of semiconductors within the EU to one fifth of the world's supply by 2030.