To combat chip shortage, Bosch to invest $296M to produce semiconductors

To combat chip shortage, Bosch to invest $296M to produce semiconductors

Bosch is increasing its previously stated investment in semiconductor production in order to stay on top of the ongoing chip shortage. The company is adding an additional $296 million, on top of the $473 million Bosch already pledged to spend in 2022 last year, to new manufacturing facilities.

Most of last year’s capital was earmarked for Bosch’s new 300-millimeter wafer fabrication facility in Dresden, with about $57 million set aside for Reutlingen, near Stuttgart, where Bosch began production in December. This new funding will go almost exclusively to Reutlingen to create new production space and a total of 44,000 square meters of modern cleanroom space between now and 2025, a move the company is making in response to growing demand for semiconductors and micro electro-mechanical systems (MEMS) sensors in both the automotive and consumer electronics markets.

“Bosch is already a leading chip manufacturer for automotive applications,” said Markus Heyn, member of Bosch’s board of management and chairman of the Mobility Solutions business sector, in a statement. “And this is a position we intend to consolidate.”

(Cleanrooms are specially constructed and enclosed so that things like airborne particles, temperature, lighting, noise, air pressure and other environmental factors can be tightly controlled. Since Bosch’s semiconductors, like many others, are made of silicon carbide, the manufacturing process requires absolute clarity – silicon is found in sand and has to be refined before it can be used for manufacturing. This is an incredibly precise process that can be thrown off entirely if even a tiny speck of dust were to land on the chip at the wrong time.)

“We are systematically expanding our manufacturing capacity for semiconductors in Reutlingen,” said Dr. Stefan Hartung, chairman of the board of management of Bosch, in a statement. “This new investment will not only strengthen our competitive position, but will also benefit our customers and help combat the crisis in the semiconductor supply chain.”

The Reutlingen wafer fabs will produce 6- and 8-inch wafers. 6-inch wafers aren’t in use as much as 8-inch or 12-inch today, but the process can reduce the production cost of semiconductor products like LEDs and sensors. There’s been a shortage of specifically 8-inch wafers since 2019, and these have mainly been used in things like sensors, MCUs and wireless communication chips. The expansion of Reutlingen will serve the growing demand for MEMs in the automotive and consumer sectors and for silicon-carbide power semiconductors, says Bosch.

Bosch’s Dresden facility will produce more 12-inch silicon chips, which are used for manufacturing high performance products like CPUs, logic ICs and memories.

“AI methods combined with connectivity have helped us achieve continuous, data-driven improvement in manufacturing and thereby produce better and better chips,” said Heyn. “This includes the development of software to enable automated classification of defects. Bosch is also using AI to enhance materials flows. With its high level of automation, this state-of-the art production environment in Reutlingen will safeguard the plant’s future and the jobs of the people working there.”

Bosch is also planning to extend an existing power supply facility, constructing an additional building for media supply systems. The new production area should launch operations in 2025.

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