Auto supplier Bosch, which has its mobility solutions team headquartered in Farmington Hills, said Wednesday it plans to buy the assets of the U.S. chipmaker TSI Semiconductors so it can expand its semiconductor business with silicon carbide chips.

TSI Semiconductors is based in Roseville, California, and employs 250 people who develop and produce large volumes of chips on 200-millimeter silicon wafers for use in the mobility, telecommunications, energy, and life sciences industries.

Bosch and TSI Semiconductors have declined to disclose financial details of the transaction, which is subject to regulatory approval.

Since 2021, the auto industry has struggled with a shortage of semiconductor chips, used in a variety of car parts. Demand for chips remains high and by 2025, Bosch said it expects to have an average of 25 of its chips integrated in every new vehicle. The market for silicon carbide chips (SiC) is also rapidly expanding with a ramp-up to electric vehicles. The silicon carbide chips enable greater range and more efficient recharging in EVs because the chips use up to 50% less energy. The possible range is 6% greater than with silicon-based chips, Bosch said.

“With the acquisition of TSI Semiconductors, we are establishing manufacturing capacity for SiC chips in an important sales market while also increasing our semiconductor manufacturing, globally," Stefan Hartung, chairman of the Bosch board of management, said in a statement. "The existing clean-room facilities and expert personnel in Roseville will allow us to manufacture SiC chips for electromobility on an even larger scale.”

Bosch's big bet in chips

Over the next years, Bosch intends to invest more than $1.5 billion in the California site and convert the TSI Semiconductors manufacturing facilities to state-of-the-art processes. Starting in 2026, the first chips will be produced on 200-millimeter wafers based on silicon carbide, Bosch said in a release.

“The location in Roseville has existed since 1984," said Markus Heyn, chairman of the Mobility Solutions business sector. "Over nearly 40 years, the U.S. company has built up vast expertise in semiconductor production. We will now be integrating this expertise into the Bosch semiconductor manufacturing network."

Bosch, which makes auto parts such as brakes, steering controls and powertrains for the Detroit automakers and others, is systematically reinforcing its semiconductor business, and will have significantly extended its global portfolio of chips by the end of 2030.

In February 2022, the Free Press reported Bosch said it will invest nearly $300 million to extend semiconductor production in its facility in Reutlingen, Germany, starting in 2025. That investment was in addition to $473 million the company pledged in 2021 to invest in its facilities in Germany and Malaysia to increase chip production.

The full scope of the planned investment depends on federal and state of California incentives.

More: GM reports Q1 pretax profit decline of 6%, but raises yearly guidance

More: GM to stop production of Chevrolet Bolt EVs by year-end to focus on electric pickups

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: Bosch to acquire US chipmaker TSI Semiconductors