BOSCH INVESTS $1.1 BILLION TO DOUBLE CHIP PRODUCTION

LAS VEGAS — The biggest single investment in Robert Bosch’s history is taking place now at the supplier’s semiconductor business in Dresden, Germany. The $1.1 billion spend to construct its second wafer fabricating plant will enable a doubling of output of Bosch chips starting in 2021.

Didn’t know the world’s largest auto supplier was also in the semiconductor business?

Bosch would not be upset to hear that. While the company sells “some” of its output to a few customers around the world, that’s not the main purpose of the business unit.

Bosch’s chip- and sensor-making arm and the massive expansion it is now undertaking are really all about Bosch’s internal needs: The company makes so many products these days that are semiconductor-based that it needs more chip capacity. How many more?

“Hundreds of millions,” just for the automotive sector, Jens Knut Fabrowsky, executive vice president for Bosch Automotive Electronics, told Automotive News during this month’s CES here.

Growing appetite

When Bosch’s other electronics businesses are included, such as kitchen appliances and lawnmowers, Fabrowsky said Bosch is producing in excess of 1 billion chips a year at the company’s existing German plants. But that is no longer enough, the executive says.

Bosch has been producing semiconductors for autos since 1970, according to the company. But things are rapidly changing. Bosch’s new wave of advanced auto parts have a surging appetite for sensors and chips. The average vehicle today uses more than 20 sensors. Fabrowsky forecasts that in the next five years or so, that number will double, or possibly triple.

Because of Bosch’s wide spectrum of vehicle products and its penetration of customers all over the world, it recently estimated that “in 2016, every car rolling off the production lines worldwide had on average more than nine Bosch chips on board.” A wafer is the small flat piece of crystalline material on which a semiconductor is fabricated.

Chip-driven parts

“Cars are getting more sensors,” Fabrowsky said. “The more automated you want a vehicle to be, the more sensors you will need. Electrified, automated and connected technologies are driving this need.”

The growing inventory of chip-driven parts includes parking support systems, which require more sensors in a vehicle body and bumpers, radar features, lane-keeping technology, speed detection and augmented reality, Fabrowsky says.

“In a few years, we will also need to do things that we haven’t even imagined today.”