Bosch opens eight-inch fab

Bosch today announced that its new fab in Reutlingen, Germany, has begun operating. At a total cost of 600 million euros, the new facility, which will manufacture semiconductors and MEMS components, is the largest single investment in the history of the Bosch Group, the company said. “Despite the economic crisis, we had the will, the strength, and the resources to see this project through,” said Franz Fehrenbach, the chairman of the Bosch board of management. The company said the new facility is its response to the growing demand for ever more complex electronic components and systems in the automobile, buildings, and consumer goods such as cell phones, laptops, or game consoles.

“Making engines even more economical, and making driving even safer, will only be feasible with an increasing level of technology, particularly electronics,” Fehrenbach said.

The facility opens as auto manufacturers employ new electronic systems to lower fuel consumption and reduce emissions. The company reports that electricity is steadily taking on increasing importance for powering auxiliary systems and, in the longer term, the powertrain itself. Bosch said its 1200 engineers in Reutlingen are also working in the power-electronics field. The company said that the immediate proximity of development and manufacturing, as well as proximity to innovative automakers, is one of the reasons Bosch decided to manufacture eight-inch semiconductors at the Reutlingen location.

Once construction is completed, which is scheduled for 2016, the fab will employ about 800 people and produce up to a million chips every day. As in the neighboring Bosch semiconductor plant for six-inch wafers, which has been in operation since 1995, the new wafer fab will produce semiconductors including, for example, ASICs, analog ICs, and high-performance components. They are used, for example, in electronic control units for internal-combustion engines and transmissions, in the ESP electronic stability program, in airbag and driver assistance systems, in parking assist systems, and in night vision systems.

The new semiconductor fab belongs to the Bosch's Automotive Electronics division, which employs some 20,000 associates worldwide. Semiconductors have been manufactured at its Reutlingen headquarters since 1971. Today, 6700 men and women work at the location, manufacturing sensors, components, and electronic control units mainly for the automotive industry and increasingly also for the consumer goods industry. Following a 19.5% percent drop in sales last year, the Automotive Electronics division now expects sales to increase by at least 15% in 2010. “Nonetheless, it will take until 2012 before we regain the level of sales seen in 2007,” said Christoph Kübel, president of the Automotive Electronics division.

The division's performance reflects the development of the industry as a whole. Last year, the market for chips for the automotive industry was especially hard hit by the consequences of the economic crisis. Sales collapsed by 20% percent to $15.8 billion, while the global semiconductor market shrank by just 8% percent to a total volume of 226.3 billion dollars.