Hardly a week has passed since the USA began luring companies into the country with large subsidy programs without a German company announcing a new investment there, usually worth many millions. VW wants to build more electric cars in the USA in the future, and a battery cell factory is also to be built in North America with generous financial support from the state. Now the incentives have also contributed to the fact that the automotive supplier Bosch is investing heavily in the USA.
As the company announced on Wednesday, Bosch plans to take over parts of the American chip manufacturer TSI Semiconductors. To this end, the Stuttgart-based company wants to invest more than 1.5 billion US dollars (around 1.39 billion euros) in the Roseville location in California in the coming years and convert the TSI production facilities. So far, the company with 250 employees has mainly produced semiconductors on 200-millimeter silicon wafers for the mobility, telecommunications, energy and life sciences industries. In the future, however, Bosch intends to switch the business to silicon carbide chips (SiC), which are particularly needed in electromobility. In electric cars, SiC chips enable longer ranges and more efficient charging processes, as they have up to 50 percent less energy loss. You can also ensure that the car keeps going on one battery charge.
The deal is not yet perfect, the authorities still have to approve it. According to the company, the exact amount that Bosch will ultimately invest in the USA depends “on the funding opportunities of the US Chips and Science Act and the economic development opportunities in the state of California.” The Swabian automotive supplier also did not comment on the financial details of the planned takeover.
So far, Bosch has only invested in its chip factories in Europe
For Bosch there are advantages to taking over a plant and not building your own factory – which has also been up for debate in the meantime. Because TSI Semiconductors already has around 40 years of experience in the extremely complex production of chips, there are already systems and employees who have the necessary know-how. “That’s an advantage in terms of speed,” says Jens Fabrowsky, who is responsible for the global semiconductor business as a divisional director for automotive electronics at Bosch. Because the demand for chips for the automotive industry is enormous and, according to the company’s forecasts, will continue to increase. According to Bosch, the market for SiC semiconductors alone continues to grow strongly – by more than 30 percent on average over the year. The supplier wants to use the chips from California in its own products as well as sell them to car manufacturers. “This investment and the conversion of the factory is also another clear commitment to e-mobility,” emphasizes Fabrowsky.
“With the acquisition of TSI Semiconductors, we are expanding production capacities for SiC chips in an important sales market and at the same time are also positioning our semiconductor production globally,” says Bosch boss Stefan Hartung. In fact, Bosch recently invested in chip production in Germany: in Dresden, where chips have been manufactured since July 2021. At one billion euros, the construction of the semiconductor factory there is the largest single investment in the company’s history to date. In total, Bosch has already invested more than 2.5 billion euros in its semiconductor production facilities in Reutlingen and Dresden since the introduction of the 200-millimeter technology in 2010.
And while Bosch is now aiming for the USA, US companies have recently put a lot of money into chip factories in Germany. The American semiconductor specialist Wolfsspeed, together with the supplier ZF, is setting up a production facility in Saarland – by the way, chips made of silicon carbide are also to be manufactured there, especially for electric cars. The US corporation Intel is building a chip factory in Magdeburg, and Infineon is investing billions in a new plant in Dresden. But even if the EU, like America, distributes generous subsidies for domestic semiconductor production: “The high energy costs are fundamentally a clear competitive disadvantage for locations in Europe,” says Jens Fabrowsky.