Due to the ongoing chip shortage gripping the supply chain, Bosch GmbH will spend $296 million for new manufacturing facilities in an expansion to its Reutlingen, Germany, wafer fab.
The move comes after Bosch already committed $463 million to expand its wafer fabs in Dresden and Reutlingen and build a new semiconductor testing facility in Penang, Malaysia, this year.
The new investment will create new production space and the necessary clean-room facilities between now and 2025. Bosch said this expansion will help to meet the growing demand for chips used in mobility and internet of things (IoT) applications.
While currently in the middle of a chip shortage, demand for semiconductors is not expected to wane any time soon with the Semiconductor Industry Association (SIA) forecasting an increase in demand of 5% over the next decade.
“We are systematically expanding our manufacturing capacity for semiconductors in Reutlingen,” said Stefan Hartung, chairman of the board of management of Robert Bosch GmbH. “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 construction of the new extension will create an additional 38,750 square feet of clean-room space and by 2025, the capacity will produce semiconductors based on technology already in place at the plant. The production area is scheduled to go into operation in 2025.
After its previous investment and this new investment, the Reutlingen facility will grow to about 473,612 square feet by the end of 2025 from about 376,737 square feet currently.
The fab uses 6 inch and 8 inch process nodes manufacturing semiconductor components such as ASICs, microelectromechanical systems (MEMS) sensors and power semiconductors for the automotive and consumer electronics markets.
Since 2021, Bosch has been expanding its semiconductor manufacturing to help in the chip shortage, particularly in the automotive sector that has been hit specifically hard, leading to many automotive OEMs revising revenue forecasts and delaying manufacturing vehicles.
In June of last year, Bosch opened its new fab in Dresden, a 12 inch wafer facility that will develop microelectronics for automated and connected driving.