Germany’s Bosch Group has agreed to buy California-based chip manufacturer TSI Semiconductors and invest $1.5 billion to expand U.S. production of silicon carbide chips for electric vehicles.
Bosch and TSI Semiconductors did not disclose a purchase price.

Bosch plans to invest $1.5 billion to retool TSI Semiconductor’s chip production facilities in Roseville, California to start producing silicon carbide chips by 2026.

The investment will be dependent on federal funding opportunities through the CHIPS act as well as state subsidies, Bosch said in a statement.

Bosch said the TSI Semiconductors facility would become the third pillar of in-house semiconductor production, along with two sites in Germany.

“With the acquisition of TSI Semiconductors, we are establishing manufacturing capacity for SiC chips in an important sales market while also increasing our semiconductor manufacturing, globally,” Stefan Hartung, chairman of Bosch, said.

Bosch was hit hard over the past two years by disruptions to semiconductor production in Asia, exacerbated by the COVID-19 pandemic. Bosch’s automaker customers have continued to push for more secure, diversified sources of chips.

The silicon carbide chips Bosch said it will manufacture at the TSI Roseville site are increasingly in demand by electric vehicle manufacturers. The silicon carbide chemistry enables greater driving range and faster recharging, Bosch said.

Demand for silicon carbide semiconductors is growing by 30 percent annually, Bosch said. That demand has led to a surge in investment in the chips, Reuters news report said.

U.S-based Wolfspeed is building new plants to make silicon carbide chips in New York State and in Germany. Onsemi is also investing heavily in silicon carbide and has signed a strategic agreement with Volkswagen AG to supply chips to the automaker.

The TSI site currently is a foundry for application-specific integrated circuits, or ASICs used in various industries, Bosch said.

Bosch plans to acquire the buildings, machines and infrastructure of TSI as well as well as its commercial semiconductor business. After re-tooling the factory, Bosch plans to start producing silicon carbide chips on 200-milimeter wafers – the discs of silicon that chips are produced upon – in 2026 in 10,000 feet of clean room space.

In July 2021, Bosch started production at the wafer fab in Dresden (300-millimeter wafers). At nearly one billion euros, the wafer fab is the biggest single investment in the company’s history.

In its wafer fabs in Reutlingen and Dresden, Bosch has invested more than 2.5 billion euros in total since 200-millimeter technology was introduced in 2010. On top of this, Bosch invested billions of euros for developing microelectronics.

Bosch announced last year that it will be investing a further 3 billion euros in its semiconductor business in Europe, both as part of its investment planning and with the aid of the EU’s “Important Project of Common European Interest on Microelectronics and Communication Technologies” program.