Bosch to acquire TSI Semiconductors, invest $1.5 bn in California foundry

Robert Bosch GmbH is acquiring US chipmaker TSI Semiconductors and plans to invest more than $1.5 billion in its California foundry, expanding the German company’s global bet on chips.
 

The world’s biggest auto-parts supplier plans to retool and modernize TSI’s Roseville site with a target to start producing silicon carbide chips there from 2026, Bosch said Wednesday. The company expects 30% annual demand growth for this type of chip, commonly used in power management that’s beneficial to electric cars.

“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.”

Financial terms for the deal weren’t disclosed beyond the planned investment at the foundry, which is also subject to regulatory approval. Bosch said the full scope of future spending will “heavily depend” on federal funding opportunities.

Bosch’s investment follows the US government stepping up calls and congress legislating to boost domestic chip production, as part of a push to bolster economic and national security. The purchase of TSI marks a “third pillar” for Bosch’s semiconductor business after decisions to build and scale up two sites in Germany in Dresden and Reutlingen.

“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. 

Silicon Carbide
 

ZF Friedrichshafen AG, one of Bosch’s principal rivals, has made a similar bet on silicon carbide chips, investing $3 billion with US chipmaker Wolfspeed Inc. in a German fab to make chips for EVs.

Silicon carbide offers advantages because it’s a more energy efficient material and it does a better job as a power converter than other semiconductor compositions. In EV batteries using the material, for example, watts of power can be crammed in more quickly, cutting charge times and boosting range.

Privately-held Bosch disclosed revenues of €88.4 billion ($97 billion) last year, with $15 billion of sales from North America. The company employs 37,000 staff in the region, with the TSI deal adding some 250 workers at this point.

While Hartung said Bosch welcomes any support from Washington to get the deal done, he added concerns that Europe and the US are embroiled in a subsidy war are overblown.

“Both sides on the Atlantic are investing into green growth,” the CEO said. “A lot of private investment needs to be mobilized, and I think that’s the intention of all of these regulations.”