Bosch plans to spend US$3 billion to hike chip output for multiple industries, customers

Bosch plans to invest more than $3 billion (all figures in USD) in its growing semiconductor business by 2026 in a bid to power its way clear of the world’s gnarled supply chain of chips.

The investment will address a range of semiconductor industry needs, including the addition of testing centres, research into new kinds of chips and, most important, new chip-production capacity in Germany.

Over the past 18 months, a shortage of microchips has caused automakers around the world to cancel 13 million vehicles from production schedules, according to AutoForecast Solutions LLC.

But the bad news inside Bosch’s aggressive plan: The investment won’t all go to automobiles.

Bosch, the world’s biggest auto parts supplier, has hundreds of mouths to feed in its sprawling global portfolio of electronic products, ranging from coffee makers and toasters to home security systems, power tools, video surveillance products and air conditioning units — on top of $49.14 billion in sales of increasingly sophisticated parts to automakers last year.

“Microelectronics is the future and is vital to the success of all areas of Bosch business,” Bosch Chairman Stefan Hartung said in a statement released Wednesday in conjunction with Bosch Tech Day in Dresden, Germany. “We hold a master key to tomorrow’s mobility.”

The supplier wants to solve not only its own yawning demand for more microchips, but also Europe’s. The investment will be made in response to the European Chips Act, with the European Union and German federal government providing some of the funding to foster investment to spur on the European microelectronics industry.

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