American chipmaker Wolfspeed and partner ZF announced plans on February 1 to develop a new $3-billion chip production plant and a Silicon Carbide R&D center in Germany. The company aims to begin construction once the EU grants the subsidy approval within months.
“We have a strong partner by our side in ZF, which brings industry-leading experience in scaling components for electric mobility as well as the aptitude to accelerate innovation in Silicon Carbide systems and power devices. I am confident this partnership will lift Silicon Carbide semiconductor technology to a new level of global impact, supporting increased sustainability and efficiency efforts across a multitude of industries.”
Wolfspeed CEO & President Gregg Lowe
The announcement was also confirmed by Mr. Bundeskanzler Olaf Scholz, Federal Chancellor of the Federal Republic of Germany, on his Twitter account.
Wolfspeed-ZF partnership
Silicon Carbide tech giant Wolfspeed and German chip conglomerate ZF Friedrichshafen formed a strategic partnership to jointly develop an innovation lab. The planned lab will explore potential advancements in “Silicon Carbide systems and devices for mobility, industrial and energy applications.”
The partnership will also pursue the development of the biggest Silicon Carbide device fab in Ensdorf, Germany, at 200mm. Notably, both facilities are covered by the Important Project of Common European Interest (IPCEI) for Microelectronics and Communication Technologies framework. These proposed facilities are subject to state aid approval from the European Commission.
Meanwhile, ZF will commit $185 million for a stake in the chip factory and will acquire a controlling interest in the research facility.
“These initiatives are a significant step towards a successful industrial transformation. They strengthen European supply resilience and, at the same time, support the European Green Deal and the strategic goals for Europe’s Digital Decade.”
ZF CEO Dr. Holger Klein
As for the site, the Saarland region will house the world’s biggest Silicon Carbide device fabrication, which will be operational in 2027.
What’s the big deal?
The investment has a strong potential to address the ongoing global automotive shortage brought about by the COVID-19 pandemic. Moreover, Europe‘s leading automaker, VW, has already expressed worries that the chip shortage would make 2023 unpredictable and difficult, although supplies are expected to increase.
Notably, Wolfspeed’s silicon carbide chips have become popular among EV automakers due to their increased power efficiency and ability to withstand high voltages. That said, the upcoming EV chip factory and R&D center will ultimately improve the supply chain shortage and boost production in the coming years.
