Bosch to invest an extra €400m in semiconductor production

As the automotive industry continues to struggle through the ongoing chip crisis, parts manufacturers are doubling down on production.

Bosch is one of the world's largest electronics suppliers to automotive manufacturers and, as such, the pausing of production at its European plants last year thanks to COVID-19 restrictions had a significant part to play in the semiconductor shortage.

However, the supplier is now looking to double down on its road to recovery, announcing it will spend an extra €400 million (AU$615.45m) to expand its existing production facilities – aiming to get on top of the shortage and prevent it from happening again in the future.

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Having recently opened a new, €1 billion (AU$1.57bn) semiconductor factory in Dresden, Germany, Bosch plans to spend a majority of its investment on the new plant, targeting increased production in 2022.

Roughly €50m (AU$76.93m) will be spent on the fabrication plant in Reutlingen, with up to €150m (AU$230.79m) to be invested between 2021 to 2023 on additional clean room space across all factories.

On top of the investments in its German plants, Bosch also plans to build a semiconductor test centre at its Penang facility in Malaysia – although this isn't expected to become operational until 2023.

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Bosch chairman Dr Volkmar Denner said the recent shortages and effects on the industry have forced the company to keep more production in-house.

“Demand for chips is continuing to grow at breakneck speed," said Dr Denner.

"In light of current developments, we are systematically expanding our semiconductor production so we can provide our customers with the best possible support.

“These planned investments demonstrate once again the strategic importance of having our own manufacturing capacity for the core technology of semiconductors."