29 (UPI) -- Auto parts supplier Bosch announced Tuesday that it will invest an additional 400 million euros in 2022 to expand production capacity at its plants in Dresden and Roitlingen, Germany, and to set up a semiconductor testing center in Penang, Malaysia, most of which will be used to speed up production at the 12-inch fab in Dresden. As the world's largest supplier of auto parts, the company wants to increase chip production and address the global chip shortage.

Bosch Chairman Volgmar Denner said demand for automotive chips continued to grow at an alarming rate and that Bosch was gradually expanding its chip production capacity to provide customers with the best support based on the current lack of cores.

The Bosch Dresden plant was put into operation in June this year with a total investment of US$1.17 billion. Earlier this year, Bosch also expanded its Reutlingen plant near Stuttgart, which covers 377,000 square feet.

It is understood that Bosch will invest 50 million euros in the 8-inch fab in Roitlingen over the next year and 150 million euros in the plant to expand the cleanroom space between 2021 and 2023. The first phase of the plant expanded production by about 10%, mainly based on the increased demand for MEMS sensors, silicon carbide power semiconductors and expansion of production capacity. The chip testing center in Penang plans to begin testing chip and sensor products starting in 2023. The test center will initially cover approximately 150,000 square feet and the test facility will be built in phases.