Bosch, a German multinational engineering and technology company, has entered into a definitive agreement with the U.S. Department of Commerce for US$ 225 million in direct funding through the CHIPS Program Office, to manufacture silicon carbide (SiC) semiconductor chips in the United States. The funding will support Bosch’s investment of US$ 2 billion into its Roseville, California semiconductor facility to produce SiC chips.
According to a Bosch press release, the company is converting the semiconductor facility to manufacture and test SiC semiconductors using new production equipment and processes. SiC semiconductors offer significant advantages for data centers by enabling more efficient high-power conversion, produce less heat, and support smaller compact power components.
These characteristics are valuable for hyperscale and AI data centers, where operators are seeking ways to improve power delivery efficiency, reduce cooling requirements, and increase rack power density. By lowering energy losses in power supplies, uninterruptible power systems (UPS), and other power-distribution equipment, SiC devices can help data center operators reduce operating costs while supporting the rising power demands of next-generation AI infrastructure.
“We are focused on growth and investment in the United States in order to increase the share of our global portfolio that is represented by North America and the U.S. specifically, the Roseville investment is a key milestone in our 120 years in the U.S., and we are appreciative of the support of the Administration as we look to accelerate our growth here,” said Paul Thomas, President and CEO, Bosch -North America. “The start of sample production and our agreement with the Department of Commerce is a milestone in providing our local customers with what they have requested – localized U.S.-based manufacturing.”
He further said, “The production of silicon carbide chips in the United States helps to support supply chain resiliency and capitalizes on the expertise of U.S. manufacturing associates to bring this technology to the U.S. market in a timely manner.”
The investment is expected to strengthen the domestic supply of advanced power semiconductors that are becoming increasingly important for data center infrastructure, particularly as AI workloads drive unprecedented growth in electricity consumption. Bosch plans to invest up to US$ 7.5 billion in U.S. operations until 2031, when the company will celebrate its 125th anniversary in the U.S.
The Roseville facility is Bosch’s first semiconductor production site in the United States, and the project has received a US$25 million California Competes Tax Credit from the Governor’s Office of Business and Economic Development (GO-Biz) to support redevelopment of the facility.
“The Trump Administration is committed to developing a secure supply chain here in the United States that will enable continued innovation and competitive leadership in industries of national and economic security importance,” said Howard Lutnick, Secretary of Commerce.
“Silicon carbide semiconductors are the enabling technology behind electrification in multiple critical industries including energy, automotive, and defence. The CHIPS Program incentive supports Bosch’s effort to onshore silicon carbide technology that will bolster supply chain resiliency for our country,” said Bill Frauenhofer, Executive Director for Semiconductor Innovation and Investment, Department of Commerce.
Silicon carbide semiconductors are increasingly being adopted in power electronics for data centers, industrial equipment, renewable energy systems, and other high-power applications. Compared with conventional silicon devices, SiC devices can operate at higher voltages and temperatures while delivering lower power losses and higher switching efficiency. These attributes make SiC technology particularly well suited for the next generation of AI and cloud data centers, where improving power efficiency has become a critical factor in scaling computing capacity sustainably.