Bosch, a global supplier of technology and services, has officially opened one of the Asia’s most advanced semiconductor backend sites in Penang of Malaysia for the final testing of its automotive chips and sensors.

Until the middle of the 2030, Bosch intends to invest around EURO 350 million ($384.35 million) in the site, Bosch said in a statement on Tuesday.

With the opening, the company continues to systematically reinforce its semiconductor business and manufacturing footprint to meet global chip demand.

“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,” said Klaus Maeder, member of the Bosch mobility sector board responsible for operations.

“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,” he added.

According to the statement, the production of semiconductors can basically be divided into two sections: the so-called front-end and back-end production.

With a land area of 100,000 square meters, the facility in Penang is the first of its kind in Bosch’s Southeast Asia region.

It will primarily focus on the latter, which is final testing of chips manufactured at Bosch’s fab in Dresden, Germany.

The high-tech semiconductor backend site currently covers some 18,000 square metres and includes clean rooms, office space, and laboratories for quality assurance and manufacturing.

“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 Chow Kon Yeow, caretaker chief minister of Penang.

He affirmed Bosch’s close relationship with Penang and thrive to work together to accelerate Penang’s vibrant electrical and electronic (E&E) ecosystem development, anchoring its status as the Silicon Valley of the East, and ensuring beneficial economic spillovers for Malaysia.

Malaysian Investment Development Authority (MIDA) chief executive officer Wira Arham said that 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,

“This project is in line with the National Investment Aspirations (NIA) to make Malaysia a strategic investment hub and promote high-skilled jobs and ensure that Malaysia’s industries remain resilient and competitive,” he added.

According to the statement, Malaysia is an important hub in Bosch’s global semiconductor supply chain, and the country is estimated to cover around 13 percent of the global backend production.

“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,” said Landhaeusser.

With the addition of an advanced backend site in Southeast Asia, Bosch said it is completing its internal process chain especially for the semiconductors manufactured in Dresden, Germany.

Bosch is currently carrying out the final testing of its semiconductors for the most part in Reutlingen, Germany, Suzhou, China, Hatvan, Hungary, as well as Malaysia.

The new Penang facility is expected to employ up to 400 associates by mid-2030.

With a total of 4,200 associates and nearly MYR 400 million ($89 million) investments in Malaysia, as of December 31, 2022, Penang is home to the largest number of manufacturing facilities in a single country for Bosch in Southeast Asia.

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