Bosch Australia expects to manufacture 100 million diodes this year, with 100% of them destined for export.
WHILE we will no longer be making cars here in Australia after 2017, many in the automotive supply industry are planning to continue manufacturing here, though much will depend on the Federal Government’s decision on the retention of the current Automotive Transition Scheme (ATS).
Oliver Wolst, VP Automotive Electronics with Bosch Australia, said the company is presently evaluating future investments in Australia with the potential of a new production line for its high-efficiency diodes (HEDs), which act like a one-way electricity valve in a vehicle’s alternator.
“As well as global competition within a global company, a lot depends on the environment here in Australia, in particular the Federal Government’s policy settings.
Wolst told Manufacturers’ Monthly, the cancellation of the ATS will making it more difficult to manufacture here and could impact the company’s decision on a new $14m production line.
“With the ATS we have a much better chance to win contracts then without it,” Wolst explained.
He pointed out that the automotive supply industry is still successfully operating here in Australia, and benefiting from the scheme.
Currently the Bosch Clayton facility is supplying 20% of all the world’s diodes, and is now the sole Bosch diode producer following the closure of the Germany production plant several years ago.
In terms of numbers, Bosch Australia manufactured 92 million diodes in 2014, with 100% of Bosch Australia’s diode production destined for export. Wolst predicts this number will grow further this year to around 100million diodes, valued at around $60m.
Being competitive
Wolst explained that Bosch Australia is very competitive with Germany when it comes to manufacturing diodes, but says the question is not about being competitive with Germany, but being competitive with Taiwan and China.
“Despite having significantly higher labour costs here, we remain competitive, but it’s a continuous battle.
“On the positive side we have a very highly experienced and efficient team both in the workshop and management.
“Our staff turnover is very low, and despite increased salaries, we have been able to reduce production costs over the past three years,” Wolst said.
He explained that the company’s diode team of around 110 works on average three shifts a day, five days a week. Though Wolst says when demand increases they do run weekend shifts.
“There is a high degree of automation at the production plant, with only 20 to 25 people per shift running six production lines.”
Wolst pointed out that the diodes are not only destined for Bosch alternators, but the company produces a small but growing number of diodes for third party customers.
“This only happened earlier this year, but already we are seeing excellent results, especially in China.
“We are seeing a strong potential for growth, with the market continuing to grow with more and more cars being built globally.”
On top of that he says there is a growing demand for alternators with 10 diodes, instead of the normal six, meaning even more opportunities.
“This is quite a growth potential for us, coupled with the growth in our external customer business.
While Wolst admits the low Australian dollar is helping the company on the sales side, he says it is having a negative impact on the material purchasing side, with most of the company’s raw materials imported. “But overall the low Australian dollar is a positive for us,” he said.
Diode production
Wolst explained that there are two phases to manufacturing a diode, as in most semi-conductor industries.
“First there is a wafer manufacturing phase where the active material, the silicon, is processed in a clean room environment. This is where the functionality of the silicon is actually established.”
He said the next phase in the manufacturing process, the assembly, can be quite challenging because of the very high power to be managed in the diodes.
“These diodes are very different from the diodes we produce for digital devices. The housing is a large piece of copper, and therefore is an exotic assembly process where basically the silicon is completely enclosed in two copper blocks.
“This ability to produce a semi-conductor with high functionality plus be able to conduct current in a very high temperature environment is the key to the technology,” he said.
Wolst admits much of the technology was developed in Germany, but since 100% of the production moved to Australia seven to eight years ago, the development of new manufacturing and assemble processes are produced here.