Acquisition Details
Germany's Bosch Group announced its acquisition of TSI Semiconductors, a California-based chip manufacturer, as part of its strategy to establish a manufacturing base for silicon carbide chips in the U.S. These chips play a crucial role in enhancing the range and efficiency of electric vehicles (EVs).
Investment and Production Plans
Earlier in April, Bosch had revealed its plans to purchase key assets of TSI's chip production facilities and invest $1.5 billion to upgrade the Roseville, California site for silicon carbide chip production. The newly formed company, Robert Bosch Semiconductor LLC, is scheduled to commence production in 2026.
Financials and Production Strategy
While the purchase price was not disclosed, Bosch indicated that the investment would heavily rely on federal funding opportunities through the CHIPS Act and state subsidies. The TSI facility will serve as the "third pillar" of Bosch's in-house semiconductor production, complementing its two existing sites in Germany.
Strategic Importance
Paul Thomas, the incoming president of Americas for Bosch Mobility, emphasized the significance of the acquisition by stating, "By extending our semiconductor operations, we are strengthening our local presence in an important market for high-efficiency electronic solutions."
Impact of Semiconductor Shortage
The semiconductor production disruption in Asia, worsened by the COVID-19 pandemic, severely impacted automotive manufacturers like Bosch over the past two years. Although the shortage has eased, it has not completely resolved, prompting Bosch's automaker customers to seek more secure and diversified sources of chips.
Demand for Silicon Carbide Chips
The silicon carbide chips that Bosch plans to manufacture at the TSI Roseville site are increasingly sought after by electric vehicle manufacturers. Bosch noted that the silicon carbide chemistry enables a greater driving range and faster recharging, contributing to a 30% annual growth in demand for silicon carbide semiconductors.
