One-time chip supply shocks over, but structural deficit remains, Bosch CEO says

CEO of German technology group Robert Bosch GmbH said on Wednesday that although the one-time supply shocks to the semiconductor market had passed, capacity was still lacking to meet global demand.

“There were one-time problems which are now dealt with,” Volkmar Denner said, speaking at a car industry conference organised by autos publication Automobilwoche in Ludwigsburg.

“What is now happening is a structural deficit: there is much more demand than there is ability to produce.”

Bosch has earmarked more than 400 million euros ($462.56 million) for investments in microchip production in Germany and Malaysia next year, with the largest part of its budget spent on a faster expansion of its Dresden, Germany factory for 300-millimeter wafers, inaugurated in June.

But Bosch itself relies on suppliers to make part of some of its chips and sensors, Denner said, and as such was also feeling the pain of bottlenecks that have crippled the supply of products relying on semiconductors – which include both cars and a range of electronics – worldwide in recent months.

“In the things we make ourselves, we can take pressure out of the pipeline. But a Bosch sensor has a lot of parts we buy from others,” Denner said.