Bosch, the major automotive supplier, announced that the company would invest more than EUR 400 million (approximately US$464 million) at its factories in Dresden and Reutlingen, Germany, and Penang, Malaysia, respectively, as the chip shortages continue hobbling the automotive industry.
The automotive industry worldwide could lose $210 billion in revenue this year due to chip shortages and other supply bottlenecks, based on the consulting firm AlixPartners. That is twice the number of losses estimated a few months ago.
AlixPartners added carmakers will lose production this year of $7.7 million vehicles, up from its May forecast of losses of $3.9 million.
Aiming to accelerate its manufacturing capacity, Bosch stated in the press release that most of the capital expenditure is earmarked for its new 300-millimeter wafer fabrication in Dresden. More particularly, around EUR 50 million of the sum will be invested in Reutlingen's wafer fabrication, a process to produce complete electrical or photonic circuits on semiconductor wafers.
Bosch will also build a test center for semiconductors from scratch in Penang. Since 1972, Penang is home to Bosch's three existing manufacturing sites, Robert Bosch (M), Robert Bosch Power Tools, and Robert Bosch Automotive Steering as well as research and development (R&D) offices. Currently, Bosch's workforce in Penang has a total headcount of 4,500 employees.
"These planned investments demonstrate once again the strategic importance of having our own manufacturing capacity for the core technology of semiconductors," said Dr. Volkmar Denner, the Chairman of the Board of Management of Robert Bosch GmbH in the press release.
