Bosch looks to boost semi-conductor capacity

BOSCH, which is the only automotive supplier in the world that manufactures power semiconductors made of silicon carbide, has invested more than €250 million ($A390 million) to further extend its wafer fabrication facility in Reutlingen, Germany.

Since last year, vehicle sales, especially those of luxury and electrified vehicles, have been lower than expected due to a shortage of stock. This occurred due to a constrained supply of semiconductors, which forced car factories to either reduce production of certain in-demand models, or de-specify derivatives to ensure better future availability.

When the Covid-19 pandemic forced car manufacturers to cut back production and reduce their “chips” orders, semiconductor suppliers shifted their finite production capacity to serve other industries. That’s why, when the car market recovered quicker than expected, vehicle brand’s semiconductor inventories ran very low.

It’s believed that the shortage will at least be reduced in the second half of 2022, which will manifest in an improved supply of vehicles to importers and their dealer networks. But, according to the World Economic Forum, given the complexities of the semiconductor production, long lead times, difficulties in increasing capacity and the time-consuming process to switch between suppliers, the shortage is far from over.

Bosch’s efforts to address the ongoing global chip shortage, involves an upgrade of its the wafer fab in Reutlingen. It will invest more than the equivalent of $A390 million to create a new production space and clean-room facilities over the next three years. This, it says, will give the German company “the firepower to meet the continuously growing demand for chips used in mobility and consumer electronic applications”.

“We are systematically expanding our manufacturing capacity for semiconductors in Reutlingen,” Robert Bosch GmbH’s board of management chairman Dr Stefan Hartung said.

“This investment will not only strengthen our competitive position but benefit our customers and help combat the crisis in the semiconductor supply chain.”

The construction of a new extension in Reutlingen will create an additional 3600m2 of clean-room space. Bosch will extend an existing power supply facility and construct an additional building for media supply systems to serve the new and existing areas.

However, the new production capacity will only become fully operational by 2025.

Late last year, Bosch announced it would spend more than €400 million ($A617 million) in 2022 alone on expanding its semiconductor operations in Dresden and Reutlingen, Germany, and in Penang, Malaysia. Around €50 million ($A77 million) of this sum was earmarked for the wafer fab in Reutlingen, the German firm said.

In addition, Bosch also announced plans to invest a total of €150 million ($A231 million) in the creation of additional clean-room space in Reutlingen facility over the period from 2021 to 2023. The further expansion of the site, which will see a new extension to the manufacturing facilities, will now supplement these measures.

All in all, clean-room space in Reutlingen is set to grow from around 35,000m2 at present to over 44,000m2 by the end of 2025. The Reutlingen wafer fabs use 150- and 200mm technology, while the Dresden plant makes chips on 300mm wafers.

“AI methods combined with connectivity have helped us achieve continuous, data-driven improvement in manufacturing and thereby produce better and better chips,” Robert Bosch GmbH board of management member and chairman of the mobility solutions business sector. Markus Heyn said.

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 has been developing and manufacturing semiconductors for more than 60 years, and for more than 50 of those years in Reutlingen – both for automotive applications and the consumer electronics market. Bosch-manufactured semiconductor components include application-specific integrated circuits, microelectromechanical systems (MEMS sensors) and power semiconductors.

The further expansion of the Reutlingen site, which currently employs around 8000 associates, will primarily serve the growing demand for MEMS in the automotive and consumer sectors and for silicon-carbide power semiconductors, Bosch said. The latter was expected to play an increasingly important role in electromobility.

“Bosch is already a leading chip manufacturer for automotive applications. And this is a position we intend to consolidate,” Mr Heyn concluded.