Bosch to spend €400 million to upgrade semiconductor facilities

Parts supplier puts major investment into its Dresden, Reutlingen and Penang facilities to combat chip crisis

Engineering and technology firm Bosch will invest heavily in semiconductor technology, expanding its manufacturing facilities in Germany and Malaysia. 

It will put more than €400 million (£343m) into its Dresden, Reutlingen and Penang facilities, with aims to ramp up chip production earlier than initially planned. 

Semiconductors have been in short supply for several months, and manufacturers are continuing to feel the strain. UK car production is at its lowest point since 1982 according to the SMMT, and some manufacturers, such as Jaguar Land Rover, have extended lead times while others have removed some electrical options from their models. 

The Volkswagen Group confirmed earlier this week that its profits had dropped for the third quarter of 2021 and blamed this largely on the chip crisis. 

Bosch chairman Volkmar Denner said: “Demand for chips is continuing to grow at breakneck speed. In light of current developments, we're systematically expanding our semiconductor production so we can provide our customers with the best possible support."

Bosch will spend €150 million (£128m) on its Reutlingen wafer fab testing facility, adding 150 jobs, while its Dresden factory will ramp up semiconductor production. 

Significant sum of the investment will go towards a 4000-square-metre ‘clean-room’ space – a testing areas where temperature, living organisms, lighting, noise and several other air factors are heavily controlled.

“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," said Bosch board member Harald Kroeger. "Every additional chip we produce will help in the current situation." 

Bosch also plans to build a new automated semiconductor test centre in Penang, Malaysia, ready for 2023. The development will include clean rooms, additional office space, research and development facilities and training facilities for up to 400 associates. Plans are also in place to develop semiconductors near the facility in the future.