Bosch opens new Penang semiconductor backend site to test automotive chips – will invest RM1.62 billion

Bosch has opened one of Asia’s most advanced semiconductor backend sites in Penang for the final testing of automotive chips and sensors. Spanning a land size of 100,000 square metres, the new site covers around 18,000 square metres of clean rooms, office space as well as R&D laboratories for up to 400 associates by mid-2030.

The production of semiconductors is divided into two sections, including the so-called front-end and back-end production. The facility in Penang is the first of its kind in Bosch’s Southeast Asia region and will primarily focus on the latter, which is final testing of chips manufactured at Bosch’s fab in Dresden, Germany.

“Semiconductors are key to the success of all Bosch’s business areas. The Penang backend site is a key component in our growth strategy in the mobility sector as we respond to the increased demand for semiconductors. We chose to invest in Penang for its high level of semiconductor knowledge and skilled workforce. The proximity to business partners and customers is another advantage, as it will shorten delivery times and distances for the chips,” said Klaus Maeder, member of the Bosch mobility sector board responsible for operations.

Bosch is systematically expanding its global semiconductor activities to meet global chip demand, with Malaysia being a key player in the market. “According to local news report, Malaysia is one of the world’s 10 largest producers of semiconductor and electronic products, accounting for approximately seven per cent of the world’s semiconductor trade,” Bosch said in its release.

The country also serves as an important hub in Bosch’s global semiconductor supply chain and is estimated to cover around 13% of the global backend production. As such, the German supplier of technology and services intends to investment around 350 million euros (RM1.62 billion) in the new site until the middle of the 2030s.

As of December 31, 2022, Penang is home to the largest number of manufacturing facilities in a single country for Bosch in Southeast Asia with a total of 4,200 associates and nearly 86.2 million euros (RM400 million) worth of investments.

“We are further expanding the local semiconductor ecosystem and reinforcing our commitment in Malaysia amid our 100-year celebration. Our new facility in Penang brings Bosch’s global manufacturing network closer to outsourced semiconductor assembly and test vendors (OSATs) in the region as well as to our automotive customers in the Asian market,” commented Klaus Landhaeusser, managing director of Bosch Malaysia.

“Penang is delighted to house Bosch’s semiconductor backend site at Batu Kawan Industrial Park, which is the Group’s fourth facility in the state, following the automotive electronics, power tools, and automotive steering manufacturing plants,” said caretaker Penang chief minister Chow Kon Yeow.

Meanwhile, Datuk Wira Arham Abdul Rahman, CEO of the Malaysian Investment Development Authority (MIDA), said, “Bosch’s continued investment in Malaysia, is a testament to the trust and confidence built over the years. Having like-minded global partners like Bosch strengthens Malaysia’s position in global value chains and our goal to be an advanced manufacturing base in the region driven by innovation.”

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