By Sarah Wu

TAIPEI Germany's Bosch Group said on Wednesday that it has acquired California chip manufacturer TSI Semiconductors in a move to establish a U.S. manufacturing foothold for silicon carbide chips that keep electric vehicles (EVs) on the road longer.

Bosch said in April that it planned to buy key assets of TSI's chip production facilities and invest $1.5 billion to retool the Roseville, California site to make silicon carbide chips. Production at the new company, called Robert Bosch Semiconductor LLC, will start in 2026.

Bosch and TSI did not disclose a purchase price.

The TSI facility would become the "third pillar" of in-house semiconductor production, along with two sites in Germany, Bosch said.

"By extending our semiconductor operations, we are strengthening our local presence in an important market for high efficiency electronic solutions," Paul Thomas, incoming president of Americas for Bosch Mobility, said in a statement.

The investment "will be heavily dependent on federal funding opportunities" through the CHIPS act as well as state subsidies, Bosch said in a statement.

Like other automotive manufacturers, Bosch was hit hard over the past two years by disruption to semiconductor production in Asia, exacerbated by the COVID-19 pandemic. Those shortages have eased but not gone away. Bosch's automaker customers have continued to push for more secure, diversified sources of chips.

The silicon carbide chips Bosch said it will manufacture at the TSI Roseville site are increasingly in demand by electric vehicle manufacturers. The silicon carbide chemistry enables greater driving range and faster recharging, Bosch said.

Demand for silicon carbide semiconductors is growing by 30% annually, Bosch said.

(Reporting by Sarah Wu; Editing by Christopher Cushing)