Bosch launches state-of-the-art semiconductor backend site in Penang

Bosch, a global technology and services leader, has officially inaugurated one of Asia’s most advanced semiconductor backend sites in Penang. The facility will be primarily dedicated to the final testing of automotive chips and sensors, strengthening the global supply chain for semiconductors. The German technology group has invested 65 million euros (RM323.2 million) in the new test center and plans to further invest 285 million euros (RM1.4 billion) by the mid-2030s. The opening of the site is a significant milestone in Bosch’s strategy to meet the soaring demand for semiconductors worldwide.

Reinforcing the Semiconductor Business

“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.

The company chose Penang due to its highly skilled semiconductor workforce and abundant knowledge in the field. Additionally, the strategic proximity to business partners and customers will enable shorter delivery times and distances for the chips.

The facility will cover a sprawling land area of 100,000 square meters, making it the first of its kind in Bosch’s Southeast Asia region. The focus of the site will primarily be on the back-end production, which involves the final testing of chips manufactured at Bosch’s fab in Dresden, Germany.

Penang: The Silicon Valley of the East

The inauguration ceremony, held at the Batu Kawan Industrial Park, was graced by YAB Chow Kon Yeow, caretaker Chief Minister of Penang. The event featured a symbolic tree-planting tradition, attended by several dignitaries and representatives, including Datuk Wira Arham Abdul Rahman, CEO of the Malaysian Investment Development Authority (MIDA); Datuk Seri Lee Kah Choon, director of Invest Penang; Dato Loo Lee Lian, CEO of Invest Penang; Dato’ Hans Peter Brenner, honorary consul of the Federal Republic of Germany in Penang, along with key figures from Bosch, such as Vijay Ratnaparkhe, regional president for Bosch in Southeast Asia, Klaus Landhaeusser, managing director of Bosch Malaysia, and Yap Thoong Poh, managing director of Bosch semiconductor backend site in Penang.

The establishment of Bosch’s semiconductor backend site further solidifies Penang’s position as the Silicon Valley of the East. YAB Chow Kon Yeow expressed his delight at Bosch’s investment in the state, commending the company’s invaluable contribution to Penang’s industrialization. He highlighted the close relationship between Bosch and the region, emphasizing the investment’s potential to accelerate Penang’s electrical and electronic (E&E) ecosystem development, bringing beneficial economic spillovers to Malaysia.

The high-tech semiconductor backend site, spanning an area of 18,000 square meters, includes clean rooms, office space, and laboratories for quality assurance and manufacturing. With a workforce of 4,200 associates and nearly RM400 million (86.2 million euros) in investments in Malaysia, Penang now boasts the largest number of manufacturing facilities for Bosch in Southeast Asia. By the mid-2030s, the new Penang facility is expected to create up to 400 high-skilled jobs, contributing to Malaysia’s ambition to become an advanced manufacturing hub in the region driven by innovation.

Completing the Internal Process Chain

The addition of the Penang backend site completes Bosch’s internal process chain for semiconductors manufactured in Dresden, Germany. The company currently conducts final testing of its semiconductors in several locations, including Reutlingen, Germany, Suzhou, China, and Hatvan, Hungary. The new test center in Penang will now join this lineup, providing strategic advantages in proximity to outsourced semiconductor assembly and test vendors (OSATs) in the region and automotive customers in the Asian market.

The collaborative efforts between Bosch and the Malaysian Investment Development Authority (MIDA) played a pivotal role in the successful establishment of the new Bosch semiconductor backend site in Penang. This milestone strengthens Bosch’s position in Malaysia as a key player in its global semiconductor supply chain.

The opening of Bosch’s advanced semiconductor backend site in Penang marks a significant stride in Malaysia’s semiconductor industry and reinforces the country’s status as a key player in the global market. The investment by Bosch signifies the company’s commitment to meeting the increasing demand for semiconductors and fostering innovation in Malaysia’s high-tech landscape.