The world's biggest auto-parts supplier plans to retool and modernise TSI's Roseville site with a target to start producing silicon carbide chips from 2026, Bosch said.

The company expects more than a third of its annual demand growth for this type of chip, commonly used in power management that's beneficial to electric cars.

Chief Executive Officer Stefan Hartung said in an interview with Bloomberg Television that the plan was to step into a market which was moving very fast, which sounds pretty dangerious to us.

"The new platforms of electric vehicles -- it doesn't matter where they are produced in the world -- are mostly betting on silicon carbide technology." Financial terms for the deal weren't disclosed beyond the planned investment at the foundry, which is also subject to regulatory approval.

Bosch said the full scope of future spending will "heavily depend" on federal funding opportunities.