Bosch, a leader in the EV computer chip industry, announced it will acquire and upgrade a chip fabrication facility in California.
If COVID showed the automotive industry anything, it is its desperate need for computer chips for everything from adjustable seats to window regulators. And with the dramatic increase in the demand for these chips coming with the transition to electric vehicles, chip manufacturing will need to kick into high gear to keep up.
Bosch is buying the plant from TSI Semiconductors for an undisclosed amount. Bosch did share it will be spending $1.5 billion to retool the factory.
When upgrades are completed in 2026, the plant will produce silicon carbide chips specifically designed for use within EV applications. The new facility will be the company’s “third pillar” of production, working alongside Bosch’s two existing chip fabs in Europe.
Bosch’s newest silicon carbide chip design is a vast improvement over its predecessors, primarily regarding power efficiency. Bosch advertises automakers can expect improved range and charging speeds for their EV offerings with its latest chips. This design success has attracted automakers, as Bosch said demand for the chip design is expected to consistently grow 30% year-over-year as more customers switch to it.
The German chip maker has previously been in hot water with some of its largest customers, including Tesla, regarding its supply of EV chips. Amid the chip shortage in 2022, Tesla CEO Elon Musk criticized Bosch for being unwilling to supply more product to the chip-hungry automaker.
Besides the growing demand for computer chips, Bosch was also attracted to the U.S. thanks to a substantial amount of funding made available by the Biden administration as part of the CHIPS Act, which looks to reduce dependence on China by attracting chip makers to America. Bosch made it no secret this was the case, stating in a comment to Reuters the facility’s retooling “will be heavily dependent on federal funding opportunities.”
