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Bosch Invests RM1.62 Billion in Penang Chip Site Until 2030

Bosch is one of the pioneer investors in Penang which established its manufacturing presence in this Silicon Valley of the East since 1972. NSTP/DANIAL SAAD

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

Until the middle of 2030, Bosch intends to invest around 350 million EUR (RM1.62 billion) in the site at the Batu Kawan Industrial Park (BKIP).

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

Member of the Bosch Mobility Sector Board responsible for operations, Klaus Maeder, said semiconductors were 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," he said at the inauguration of the Bosch semiconductor backend site by caretaker Chief Minister Chow Kon Yeow at the BKIP here.

Present were Malaysian Investment Development Authority (MIDA) chief executive officer Datuk Wira Arham Abdul Rahman and Federal Republic of Germany in Penang honorary consul Datuk Hans Peter Brenner.

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 backend, which is final testing of chips manufactured at Bosch's fab in Dresden, Germany.

Chow said Penang was delighted to house Bosch's semiconductor backend site at the BKIP, which is the Group's fourth facility in the state, following the automotive electronics, power tools, and automotive steering manufacturing plants.

Bosch is one of the pioneer investors in Penang which established its manufacturing presence in this Silicon Valley of the East since 1972.

"We deeply appreciate your invaluable contribution towards Penang which spearheaded our industrialization half a century ago. Fast forward to today, Penang is delighted to house your semiconductor backend site at the BKIP. "This latest facility in Penang affirms the strong confidence of Bosch in our ecosystem's capability to fulfil the stringent requirements in the automotive sector.

The Group's sustained confidence augurs well for the state's development, thus encouraging us to strive not only harder in what we do well but also greater in our niche area.

"Hence, I am confident for Bosch's investment project to deepen the state's engineering expertise in automotive semiconductor industry, while creating greater opportunities for our local supply chain and of course, job opportunities for local talents," he said.

Chow said the significance of Penang on the global scale was well attested, proven by the state's significant role in the E&E industry, which accounted for over five per cent of the global semiconductor sales over the past few years.

As the economic powerhouse of Malaysia, Penang topped the nation's list in 2021 with export value of RM354 billion recorded.

The external trade momentum persisted into 2022, reaching an all-time high of RM463 billion, representing 30 per cent of the country's total. In particular, 74 per cent of the said amount is contributed by E&E, represented nearly 60 per cent of the country's E&E total.

In terms of investment performance, the state garnered RM13.7 billion in total approved manufacturing investments in 2022, of which foreign direct investments (FDI) contributed 71 per cent of the total investment inflows.

In the first quarter of 2023, Penang is the second highest contributor for the country's approved manufacturing investments.

The RM3.3 billion recorded in January to March 2023 comprises 35 manufacturing projects, which is estimated to create 2,217 new job opportunities in the state.


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