Germany’s Bosch Group said it is acquiring key assets of US chipmaker TSI Semiconductors.
Bosch said on Wednesday it plans to invest $1.5 billion to retool TSI’s chip production facilities in Roseville, California to start producing silicon carbide chips by 2026.
The world’s biggest auto parts supplier plans to acquire the buildings, machines and infrastructure of TSI as well as its commercial semiconductor business.
The investment will “heavily depend” on federal funding opportunities, said Bosch.
Bosch also said that the TSI facility would become the “third pillar” of in-house semiconductor production, along with two sites in Germany. Bosch’s automaker customers have continued to push for more secure, diversified sources of chips.
“We step into a market which is developing very fast,” chief executive officer Stefan Hartung said in an interview with Bloomberg Television.
“The new platforms of electric vehicles — it doesn’t matter where they are produced in the world — are mostly betting on silicon carbide technology,” added Hartung.
The silicon carbide chips are increasingly in demand by electric vehicle manufacturers, Bosch said.
The silicon carbide chemistry enables greater driving range and faster recharging, Bosch added.
Demand for silicon carbide semiconductors is growing by 30% annually, it said.
Financial terms for the deal weren’t disclosed.
The TSI site currently is a foundry for application-specific integrated circuits, or ASICs used in various industries, Bosch said.
“This $1.5 billion investment will bring down costs, strengthen our electric vehicle supply chain, help rebuild American manufacturing, and create economic opportunity,” US Vice President Kamala Harris said in a separate statement.