MUNICH, Germany — German automotive supplier Bosch Group will invest 550 million euros ($ 688 million) in a new semiconductor fab in Reutlingen near Stuttgart. In the plant, the company plans to manufacture ASICs, ASSPs, Analog and Power chips as well as MEMS devices.

The fab is set to launch production by mid-2009. With a capacity of 1000 wafers per day, the facility will be able to produce up to one million chips daily, the company said in a press statement.

The fab will process 200-mm wafers. In the first production phase, Bosch will manufacture devices in .35-mikron technology; according to existing plans the production later will be moved to .18-mikron technology and MEMS devices. The company did not specify when it will launch this second phase.

In Reutlingen, Bosch runs a 150-mm semiconductor fab since for more than ten years which mainly produces microcircuits for Diesel engine controls. This fab will be phased out after the launch of the new fab.

The move is connected to Volkswagen's decision to switch its Diesel engine designs from pump-injector systems to common-rail injection systems. As well as other facilities in Rodez, France and Bursa, Turkey, Bosch's existing fab produces semiconductors mainly for this client. While all 620 workers in Reutlingen will be offered another job in the new fab with its 800 employments, the future of the jobs in Rodez and Bursa is uncertain, a Bosch spokesperson said.

Most of the devices will be manufactured in Bosch's proprietary 'Smart Power' process. This allows the integration of highly sensitive signal processing circuitry and hi-current transistors within one die. Thus, the devices can be used to directly drive actuators.

In the MEMS arena, Bosch claims to be the world market leader with more than 100 million units produced in 2005. These microelectronic-mechanic devices are sold into automotive markets in the first place, but in 2005, Bosch established a subsidiary dubbed Bosch Sensortec for developing consumer markets. MEMS can be used as sensors in mobile phones, pocket computers and game consoles.

"With this investment in most modern manufacturing technology, we strengthen our international automotive electronics business", explained CEO Franz Fehrenbach in a press statement. Bernd Bohr, head of Bosch's automotive technology division, said he expects the automotive semiconductor market to grow by 10 percent annually in the medium term.