Bosch investing additional $3 billion in chip manufacturing

Bosch plans to further invest in semiconductor manufacturing with a $3 billion expansion into its Dresden and Reutlingen, Germany, facilities.

The company said the move is due to the growing significance of semiconductors in everything from automobiles to household appliances and smart devices as well as the ongoing chip shortage that has crippled many parts of the supply chain due to the inability to get the necessary chips for manufacturing.

The investment is part of the Important Projects of Common European Interest (IPCEI) funding program, a region-wide platform for the support of microelectronics and communications technology.

New development centers

Part of the plans for the Bosch investment is in the construction of two new development centers located in Reutlingen and Dresden, Germany, with a combined investment of $171 million.

Additionally, Bosch will spend $251 million over the coming year on the creation of an extra 3,000 square meter clean-room space at the Dresden fab.

At the Dresden fab, Bosch said it will look to enhance components such as radar sensors used in vehicles to make them smaller, smarter and cheaper. This will also include modifying its own microelectromechanical systems (MEMS) for the consumer goods industry.

One technology currently in development is a projection module that is tiny enough to be integrated into 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 300-millimeter wafers,” said Stefan Hartung, chairman of the Bosch board of management. “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 investment comes after Bosch invested $1.2 billion in the Dresden fab last year and then announced it would further expand the Dresden fab to the tune of an additional $463 million. This expansion would be dedicated to ramp up production at the fab sooner than expected.

SiC rising

Another target of investment will be the mass production of silicon carbide (SiC) semiconductors. SiC chips are used in electric and hybrid vehicles, with demand increasing for these chips as the automotive market transitions to electric vehicles. Bosch said it expects its SiC business to grow by 30% in the next few years and is exploring the use of other types of chips such as gallium nitride, which is used in laptop and smartphone chargers and could eventually be used in the automotive market.

New construction

At Bosch’s Reutlingen fab, Bosch said it will invest about $402 million in the expansion of manufacturing space and conversion of existing factory space into new clean-room space.

This construction will also create 3,600 square meters of ultramodern cleanroom space. This will be in addition to the $296 million for fab expansion at the Reutlingen fab for the creation of new production space and clean-room facilities.

In total, the fab will grow from about 35,000 square meters of cleanroom space to more than 44,000 square meters by the end of 2025.

More fabs coming

Bosch is not alone with investing heavily into the future of semiconductor manufacturing. Foundries and semiconductor vendors are heavily expanding their manufacturing prowess with building new fabs including Taiwan Semiconductor Manufacturing Co. (TSMC), Intel Corp. and Samsung Electronics that all plan to invest somewhere around $100 billion in the next five to 10 years in building new fabs and expanding current facilities.

GlobalFoundries is also expanding its manufacturing capabilities with new fabs planned as well as a joint venture with ST Microelectronics for a new 300 mm fab in France it just announced earlier this week.

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