The German Bosch Group has agreed to buy major assets from California-based semiconductor producer TSI Semiconductors and invest $1.5 billion in the United States to grow silicon carbide chips for electric vehicles.
The purchase price was not disclosed by Bosch or TSI. Bosch plans to invest $1.5 billion in retooling TSI’s production site in Roseville, California, so that it may begin producing silicon carbide chips by 2026.
According to Bosch, the investment “will be heavily dependent on federal funding opportunities” through the CHIPS (Chips and Science Act) Act as well as government subsidies.
The TSI facility, along with two sites in Germany, will represent the company’s “third pillar” in its own semiconductor production sector, according to Bosch.
Bosch, like other automotive and industrial equipment makers, has been heavily hurt by disruptions in Asian semiconductor manufacturing over the last two years, which have been compounded by the COVID-19 outbreak. These issues have subsided but not eliminated. Customers of Bosch automakers continue to demand safer and more diverse chip sources.
Silicon carbide chips, which the Bosch group claims will be manufactured at TSI’s Roseville facility, are in high demand from EV manufacturers. The silicon carbide chemistry, according to Bosch, delivers extended range and faster reloading.
According to Bosch, the demand for silicon carbide semiconductors is increasing at a rate of 30% each year.
This demand has resulted in a spike in chip manufacturing investment. Wolfspeed Inc, an American corporation, is constructing new factories in New York State and Germany to manufacture silicon carbide chips. Onsemi Corp is also aggressively investing in silicon carbide manufacturing and has secured a strategic arrangement to provide chips to Volkswagen AG.
According to Bosch, the TSI manufacturing site is now a foundry for application-specific integrated circuits, or ASICs, which are utilized in a variety of industries.
Bosch intends to purchase TSI Semiconductors’ buildings, equipment, and infrastructure, as well as its commercial semiconductor company. After retooling the factory, Bosch aims to start producing silicon carbide chips on 200mm wafers (the silicon disks on which the chips are manufactured) in 2026.