Bosch will acquire the assets of U.S. chipmaker TSI Semiconductors to expand its semiconductor business with silicon carbide chips (SiC), the German engineering and technology giant said Wednesday.
The acquisition includes a $1.5 billion investment over the next few years to upgrade TSI Semiconductors’ manufacturing facilities in Roseville, California. Starting in 2026, the first chips will be produced on 200-millimeter wafers based on silicon carbide.
News of more chips being produced on U.S. soil is welcome in the automotive world, one of the industries most affected by the global semiconductor shortage that began with the COVID-19 pandemic. The shortage started when factories shut or slowed production due to lockdowns, thus disrupting global supply chains. A surge in demand for electronics as people stayed inside, as well as a boom in demand from an automotive industry determined to go electric and build smarter vehicles, only exacerbated the problem.
Electric vehicles on average use more chips than their gas-powered counterparts, and most new EVs hitting the market today promise advanced driver assistance systems and high-tech infotainment systems. As a result, in 2021, the average car had about 1,200 chips, twice the number in 2010, and a figure that will likely increase.
SiCs, which Bosch’s new factory will produce, have been a hot commodity among automakers, as well. The company says the market for SiCs has grown by 30% a year on average, and that’s in part because they offer greater range and more efficient recharging for EVs. They also lose up to 50% less energy, last longer and require less maintenance.
Bosch expects an average of 25 of its chips will be integrated in every new vehicle by 2025.
“This $1.5 billion investment will bring down costs, strengthen our electric vehicle supply chain, help rebuild American manufacturing, and create economic opportunity for the working families of California,” said Vice President Kamala Harris in a statement. “And it will put more electric vehicles on the road, a priority I have worked for since I served in the United States Senate. All of this was made possible by our Administration’s Invest in America agenda.”
Bosch said the full scope of the planned investment will depend heavily on federal funding opportunities available via the CHIPS and Science Act, which the Biden administration signed into law in August 2022, as well as economic development opportunities within California.
The CHIPS and Science Act aims to boost American semiconductor research, development and production, as the U.S. races to compete with China. Last year, the U.S. prohibited the sale of advanced chips with high performance and fast interconnect speeds to China.
Bosch wouldn’t say how much money it hopes to get in federal funds to advance its U.S.-based chip-making goals. In February, the Biden administration launched the first CHIPS for America funding opportunity, a $50 billion injection to revitalize the semiconductor industry, including $39 billion in semiconductor incentives. The administration said the first funding opportunity seeks “applications for projects to construct, expand or modernize commercial facilities for the production of…semiconductors.”
Bosch and TSI Semiconductors are not sharing the terms of the acquisition, which is subject to regulatory approval. Bosch says the buy will reinforce its international semiconductor manufacturing network. The company has been producing semiconductors for over 60 years and has invested billions of euros into the business globally, specifically at its water fabs in Reutlingen and Dresden, Germany.