German automotive parts and semiconductor giant Bosch announced on the 13th that it has begun prototype production of silicon carbide (SiC) semiconductors at its first company-owned chip factory in the United States. The company also reached a final agreement with the U.S. Department of Commerce for $225 million in funding, marking a full-scale push to strengthen the domestic power semiconductor supply chain.
The facility is located in Roseville, California, and represents a total investment of $2 billion to reconstruct a plant acquired from TSI Semiconductors in 2023. The investment figure includes the Commerce Department grant. Bosch expects to begin commercial production in the second half of 2026.
The move exemplifies a trend among automakers and parts suppliers expanding U.S. production to navigate high tariffs and geopolitical risks under the Trump administration. During the COVID-19 pandemic, semiconductor shortages disrupted the entire automotive industry, exposing the vulnerability of supply sources concentrated among a small number of companies in Europe and Asia.
Paul Thomas, president and CEO of Bosch North America, told Reuters that the U.S.-Mexico-Canada Agreement (USMCA) free trade pact was one factor behind the company’s expanded investment in U.S. semiconductor operations. “We thought it was a good location for us and the right thing to do,” Thomas said, emphasizing the importance of semiconductors to national security. He added that automakers are seeking partnerships with companies that “can be close to them, be robust, and supply them on an ongoing basis.”
The $225 million in Commerce Department funding comes from the CHIPS Program Office, established under the CHIPS and Science Act of 2022. “The Trump administration is committed to building secure supply chains here in the United States that enable continued innovation and competitive leadership in industries critical to our national and economic security,” Commerce Secretary Howard Lutnick said in a statement.
Unlike chips for in-vehicle infotainment systems or advanced driver-assistance systems (ADAS), SiC semiconductors are primarily used for high-voltage power control. In electric vehicles, they deliver power from the battery to the motor more efficiently, reducing heat and energy losses to extend driving range and improve charging performance. Thomas noted the chips can also be used for power supply in data centers. Some automakers and suppliers are expanding into battery production for energy storage systems supporting the AI boom.
Even as EV sales growth sputters, Thomas argued the investment is well-timed given expected demand from hybrid vehicles and defense applications.
Bosch also revealed plans on the 13th to invest up to $7.5 billion to strengthen its U.S. operations through 2031, further underscoring the company’s commitment to the North American market.