Biden-Harris Administration Announces Preliminary Terms with Bosch to Advance U.S. Supply Chain Resiliency of Crucial Semiconductor Manufacturing Components

Estimated reading time: 3 minutes

The Biden-Harris Administration announced that the U.S. Department of Commerce and Bosch have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $225 million in proposed direct funding under the CHIPS and Science Act. The proposed investment would support Bosch’s planned investment of $1.9 billion to transform its manufacturing facility in Roseville, California, for production of silicon carbide (SiC) power semiconductors. This proposed direct funding would support the expansion of their largest SiC device factory globally for Bosch, which would significantly increase the company’s production capacity and create up to 1,000 construction jobs and up to 700 manufacturing, engineering, and research and development jobs in California.

“One of the core missions of the bipartisan CHIPS and Science Act is to make targeted investments across every part of the semiconductor industry to accelerate innovation and advance U.S. technology leadership,” said U.S. Secretary of Commerce Gina Raimondo. “SiC chips are important components for applications in the automotive, telecommunications, and defense industries because they utilize less energy, and with this proposed investment, we are taking another important step in fulfilling that priority to ensure our supply chains are more secure while creating over a thousand anticipated jobs in the process.”

Bosch is a leading tier 1 automotive supplier and one of its differentiating features is a specialized semiconductor business within its portfolio. In addition, Bosch is a leading provider of trench gate SiC semiconductors for the automotive industry. The SiC devices to be produced by Bosch in Roseville are important for enhancing the efficiency of both electric vehicle driving and charging. When at full capacity, this proposed project is expected to produce the majority of Bosch’s total capacity of SiC semiconductors and could comprise more than 40% of all U.S.-based SiC device manufacturing capacity.

“The Roseville investment enables Bosch to locally produce silicon carbide semiconductors, supporting U.S. consumers on the path to electrification,” said Paul Thomas, president of Bosch in North America and Bosch Mobility Americas. “Producing this key technology in the U.S. underscores our leadership in the mobility market.”

Bosch expects to produce its first chips on 200-millimeter wafers in its Roseville facility starting in 2026. The facility will perform both front-end device manufacturing and backend testing, sorting and dicing processes.

Bosch has committed to providing affordable and high-quality child care to company employees and construction workers at the Roseville site. Bosch is launching a new navigation tool to help employees and construction workers find high quality child care, including short-term, ongoing, and back-up care at home or in center. For the purposes of construction for this project, Bosch will operate under a project labor agreement (PLA) with the Sacramento-Sierra Building and Construction Trades Council.

Bosch has indicated it plans to claim the Department of the Treasury’s Advanced Manufacturing Investment Credit (CHIPS ITC), which is 25% of qualified capital expenditures. Click here to learn more about the tax credit. In addition to the proposed direct funding of up to $225 million, the CHIPS Program Office would make approximately $350 million in proposed loans – which is a part of the $75 billion in loan authority provided by the CHIPS and Science Act – available to Bosch under the PMT.

As explained in its first Notice of Funding Opportunity, the Department of Commerce may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a PMT is signed, the Department of Commerce begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.