German engineering supplier Bosch will separate its chip business into a standalone Bosch semiconductor division from January 2028, setting an annual sales target of €5bn by 2030. The reorganisation aims to broaden its customer base beyond the automotive sector into robotics, factory automation, and artificial intelligence data centres.
Key points
- Bosch will establish a dedicated internal unit named Semiconductors in January 2028 to reach €5bn in sales by 2030.
- The group plans to expand contract chip manufacturing for third parties across consumer hardware, data centres, and industrial automation.
- Production will draw on roughly 40 sites worldwide, including upgraded plants in Germany, the United States, and Malaysia.
- The strategic shift follows recent component shortages in the European automotive sector that exposed heavy supplier concentration.
A pivot beyond the car
The new division, which will be called Semiconductors, will remain an internal unit of the Bosch group rather than a separate legal company. Chip operations currently sit within the Mobility Electronics division, which will retain responsibility for making electronic control units for passenger cars and commercial vehicles.
Creating a standalone division gives Bosch direct scope to chase buyers outside its historical base. Automotive tier-one suppliers have traditionally designed and fabricated components solely for vehicle assemblies. Bosch now intends to open its cleanrooms to external clients, expanding its semiconductor foundry business to fabricate custom silicon for third parties.
Target industries for the expanded business include factory robotics, automated machinery, and AI data centres. The company also intends to sell components directly to makers of consumer devices such as smartphones and smartwatches. Bosch noted that its chips are already used to control humanoid robots, an area where motion sensing and power delivery are critical.
“With the founding of a dedicated unit, we are opening a new chapter in our more than 60-year semiconductor history,” said Erik Rein, who heads Bosch’s chip business.
Expanding the foundry and hardware portfolio
Bosch has built strong market positions in specific categories of hardware. It is one of the world’s largest producers of microelectromechanical systems (MEMS), the miniature motion, acceleration, and pressure sensors found inside mobile phones, vehicle stability systems, and industrial machines.
Alongside sensors, the company manufactures silicon carbide chips and application-specific integrated circuits for power management. Silicon carbide components switch power with minimal energy loss, making them essential for high-voltage systems in electric vehicles, charging points, and computing infrastructure.
By broadening its contract chip manufacturing service, Bosch aims to convert its internal component designs into a commercial merchant business. Markus Heyn, deputy chairman of Bosch, said the group’s sensors are “the key” to its own products and serve as “the technological basis” for outside customer development.
Global manufacturing footprint and investments
Bosch operates around 40 chip locations across the world, supported by multi-billion-euro capital expenditure programmes over the past decade. The group invested approximately €3bn into its German wafer fabrication facilities located in Dresden and Reutlingen to increase output of silicon carbide chips and automotive logic.
In the United States, Bosch is spending roughly $2bn to convert an acquired facility in Roseville, California, into a dedicated silicon carbide production hub. The conversion aims to supply power electronics closer to North American industrial and automotive customers.
Testing and assembly capacity is also growing. Bosch is expanding its semiconductor test centre in Penang, Malaysia, with construction and tooling work planned through the middle of the next decade. In Europe, the group holds a 10% equity stake in the European Semiconductor Manufacturing Company (ESMC), the TSMC-led joint venture building an advanced foundry in Dresden.
European supply resilience and market context
The restructuring follows several years of volatile supply chains for European manufacturers. Car companies faced severe bottlenecks through the autumn during a dispute involving Dutch chipmaker Nexperia, which disrupted output and highlighted how few suppliers supply critical components to the continent.
By offering merchant foundry capacity to outside designers, Bosch provides European companies with an alternative regional fabricator. European industrial clients have sought to diversify their manufacturing options away from single-source providers in East Asia.
Bosch will continue managing its chip operations within the Mobility Electronics unit throughout 2027 while installing the commercial and operational structures required for the new division. The Semiconductors business will officially operate as an independent entity on 1 January 2028.
