German technology giant Bosch is boosting investment in its semiconductor business, injecting €3 billion ($2.99 billion) into it by 2026, Kallanish reports.

The investment is part of the European IPCEI funding on microelectronics, aimed at promoting research and innovation. The EU wants to increase its competitiveness and double its share of global semiconductor production to 20% by the end of the decade.

Bosch now plans to fund construction of two new development centres, in Reutlingen and Dresden, at a combined cost of over €170 million. It will also spend €250m over the coming year to expand its wafer fab capabilities in Dresden.

The company says this new investment in microelectronics will also open new areas of innovation, including systems-on-a-chip like as the radar sensors a vehicle uses to perform 360 degrees scans of its surroundings during automated driving. The goal is to enhance such components, making them smaller, smarter and cheaper to produce, Bosch adds.

Demand for silicon carbide (SiC) chips -- which Bosch mass produces for power electronics in EVs -- is high with an annual growth of 30% or more. The company says its order books are full and expects supply bottlenecks to last into 2023.

“We’re also looking into the development of chips based on gallium nitride for electromobility applications. These chips are already found in laptop and smartphone chargers,” says company ceo Stefan Hartung.

Before they can be used in vehicles, they will have to become more robust and able to withstand substantially higher voltages of up to 1,200 volts.