U.S. Secures Preliminary $225M Deal with Bosch for Chip Production Grants

The U.S. Commerce Department announced a preliminary agreement with German auto supplier Bosch for up to $225 million in subsidies to manufacture silicon carbide (SiC) power semiconductors in California. These semiconductors are vital for electric vehicles and other industries.

The funding will contribute to Bosch’s planned $1.9 billion investment to upgrade its Roseville, California, facility to produce SiC power chips. Additionally, the department has proposed offering Bosch approximately $350 million in government loans to support the project.

This initiative draws from the $52.7 billion fund established in 2022 to bolster U.S. semiconductor production and research. Bosch aims to begin producing SiC chips on 200-millimeter wafers at the Roseville facility by 2026. These chips are key components in automotive, telecommunications, and defense sectors, helping improve energy efficiency in electric vehicle (EV) operations and charging.

The agreement follows Bosch’s acquisition of TSI Semiconductors in 2023, a move Bosch indicated would depend heavily on federal funding. Bosch, like other automotive suppliers, faced significant challenges during the semiconductor production disruptions in Asia exacerbated by the COVID-19 pandemic.

This deal comes shortly after a similar preliminary agreement in October with Wolfspeed for $750 million in grants for a silicon carbide wafer plant in North Carolina. Once fully operational, the Bosch facility could account for over 40% of U.S.-based SiC device manufacturing capacity, the department stated.

Paul Thomas, Bosch North America’s president, highlighted that the Roseville facility will enable local production of silicon carbide semiconductors, supporting U.S. electrification goals. California Representative Doris Matsui, a co-author of the 2022 semiconductor funding law, praised the grant, emphasizing its role in advancing clean mobility and electric vehicle technologies.