Bosch Expects Chip Shortages To Last Until 2023, Although Global Chip Market Is Also In Recession

The world chip shortage will still last until 2023. (photo: pixabay doc)

JAKARTA - Technology group Bosch estimates supply shortages for some types of chips will last until 2023. Even as inflation reduces demand for certain consumer goods, the company said it was likely on Wednesday, July 13, when it announced a 3 billion euro investment in chip production.

"A lot will ease in 2022, but there will still be a bottleneck in 2023. Individual industries may need fewer chips if demand falls due to a possible downturn...but you can't build a strategy for that," chief executive Stefan Hartung said in an interview, quoted by Reuters.

Bosch announced earlier on Wednesday that it would invest 3 billion euros in chip production by 2026, the latest in a series of companies leveraging European support for the industry to reduce dependence on overseas suppliers.

The group, which manufactures silicon carbide chips and micro-sensors for everything from cars to earbuds, will put 170 million euros into a new development center in Germany and 250 million euros to expand its wafer factory in Dresden.

Bosch will also explore chip manufacturing using gallium nitride, which can achieve a four-fold reduction in power loss compared to traditional silicon-based power chips.

While other chipmakers such as Intel have plans to develop small 2-nanometer chips, Bosch's wafer fabs are designed for 40 to 200 nanometer chips used in electromobility.

"The goal should be to produce chips for the specific needs of the European industry. That means not just chips at the lower end of the nanoscale," said chief executive Stefan Hartung.

The company uses most of the chips it manufactures in its own products, but also relies on supplies from third-party manufacturers.

"Our suppliers must allocate their scarce resources in a targeted manner so we must do the same with our customers," Hartung said.