Robert Bosch has started a critical testing phase at its new semiconductor plant in Dresden, Germany, as the automotive industry struggles with a shortage of essential chips that has led to widespread production halts.
The 1 billion euro ($1.2 billion) factory is expected to start production at the end of this year, with a main focus on automotive microchips. Bosch has an existing semiconductor fabrication plant – known as a wafer fab -- in Reutlingen, Germany, near the supplier’s headquarters in Stuttgart.
At the Dresden plant, prototype silicon wafers have passed through the fully automated production process for the first time, Bosch said in a news release Monday. The wafers take about six weeks to process, with 250 fabrication steps.
The wafers will be used as part of power semiconductors for applications such as DC-to-DC converters for electrified vehicles. Bosch said it takes about 10 weeks to make a wafer into a finished semiconductor chip, with about 700 processing steps.
The Dresden wafer fab is focused on 300-millimeter fabrication, in which a single wafer can accommodate 31,000 individual chips. Bosch says this larger size offers greater economies of scale than the conventional 150 mm to 200 mm wafers.
Ground-breaking for the Dresden plant was in June 2018, and the facility will employ about 700 people.
The EU has made European semiconductor production a priority as an Important Project of Common European Interest, or IPCEI. That designation opens the door for funding of public and private projects, as well as relaxing some rules on competition in order to ramp up an industry faster.
Bosch is listed as a partner in the semiconductor IPCEI effort.
The semiconductor shortage, fueled partly by rising demand for consumer electronics in the coronavirus pandemic, has temporarily idled production lines at most automakers. Analysts and automotive executives say they expect the problem to continue through the first half of the year, with more than 1 million units in lost production expected.
Ford Motor Co. said recently that the disruption could cost several billion dollars in revenues.
Bosch ranks No. 1 on the Automotive News Europe list of the top 100 global suppliers, with 2019 sales to automakers of $46.55 billion in fiscal 2019.