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The world's largest SiC factory is under construction in Germany

Latest update time：2023-02-02

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U.S. chipmaker Wolfspeed said on Wednesday it would spend $3 billion to build a chip factory and a research and development center in Germany, with construction expected to begin within months after receiving EU approval for subsidies.

Auto supplier ZF will invest $185 million in the chip plant and will hold a majority stake in the research center, the two companies said.

German Chancellor Olaf Schulz described the investment decision as an example of "the logic of open markets and transatlantic cooperation" amid ongoing knock-on effects between the United States and Europe over a U.S. inflation-reduction bill for European companies. Negotiation of approval.

The factory will be located on the site of a decommissioned coal power plant in the Saarland region and is expected to be the world's largest silicon carbide chip factory and is expected to be operational in 2027.

Wolfspeed CEO Gregg Lowe told Handelsblatt that Wolfspeed expects to receive a subsidy of 20% of the investment amount.

"This is an important sign that Germany remains attractive even when high-tech investment is difficult," Habeck told reporters after a cabinet meeting earlier on Wednesday.

Shares of Wolfspeed, which is listed in Frankfurt, rose 7.7% in afternoon trading.

European governments are scrambling for new industrial projects amid concerns that U.S. subsidies will lure planned investment away from Europe.

The European Commission on Wednesday proposed allowing increased state aid levels so that Europe can compete with the United States as a manufacturing hub for electric cars and other green products and reduce its reliance on China, in part seen as a pushback against falling inflation.

European Commission President Ursula von der Leyen announced that as part of the plan, existing EU funds will be repurposed to speed up the approval of green projects, as well as a push to boost skills and sign trade deals to ensure the supply of key raw materials.

Europe has adopted a 45 billion euro plan to increase its share of the semiconductor market from 8% to 20% by 2030, although it still needs to be debated in the European Parliament before becoming law.

Volkswagen, Europe's largest carmaker, warned earlier this month that the chip crunch meant 2023 would remain volatile and challenging, but it expected supplies to improve.

Silicon carbide chips that Wolfspeed specializes in have been favored by electric car manufacturers because they can handle high voltages and are more energy efficient.

The company announced in September that its new U.S. factory would be completed by 2030.

Wolfspeed announces plans to build world’s largest, most advanced silicon carbide device manufacturing facility in Saarland, Germany

Wolfspeed today announced plans to build a highly automated, cutting-edge 200mm wafer fabrication facility in Saarland, Germany. The company's first facility in Europe will be its state-of-the-art facility, creating ground-breaking innovative silicon carbide development and production facilities in the EU to support growing demand for a variety of automotive, industrial and energy applications.

The Wolfspeed facility is planned as part of a collaboration within the framework of IPCEI Microelectronics and Communication Technologies and is subject to European Commission approval for state aid. IPCEI funding is intended to support technology development and initial deployment in this project.

The European fab announcement is an important part of the company's broader $6.5 billion capacity expansion plan, which includes the opening of the company's 200mm Mohawk Valley Equipment fab in April 2022 and the construction of the 445-acre John P. The Ermer Silicon Carbide Manufacturing Center (180 hectares) is located at the silicon carbide materials facility in North Carolina, which will expand the company's existing materials production capacity by more than 10 times. The first phase of construction of the materials facility is expected to be completed by the end of fiscal 2024.

"This new facility represents a big step forward for Wolfspeed and our regional customers as we strengthen our ecosystem for semiconductor production and innovation," said Wolfspeed President and CEO Gregg Lowe. "Silicon carbide equipment provides Greater energy efficiency is critical to the global shift to sustainable electrification. This new facility is critical to supporting our expansion in a very fast-moving capacity-constrained industry, particularly in the electric vehicle market as a whole. "It is important to establish a facility in the heart of Europe, close to many of our customers and partners, to facilitate collaboration on next-generation silicon carbide technology."

The announcement was made at an event at the planned 35-acre (14-hectare) site of the plant, a former coal-fired power plant in the German state of Saarland. German Chancellor Olaf Scholz was present, as well as German Deputy Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck, as well as Saarland Governor Anke Rehlinger. meeting to welcome Wolfspeed to the area. ZF CEO Holger Klein and ZF Management Board Member Stephan von Schuckmann also joined the announcement on behalf of the new partnership. Wolfspeed also announced today a strategic partnership with ZF that includes investments in Wolfspeed and a joint silicon carbide R&D facility in Germany, part of the same IPCEI framework. Fab construction is expected to begin in the first half of 2023.

"This project is a huge transformation driver and employment engine for traditional industrial areas. Furthermore, it combines important European know-how and contributes to the implementation of the European Green Deal by reducing energy consumption and CO2 emissions," Saar said Anke Rehlinger, state minister and president. "We are proud to own Wolfspeed and allow our region to play such an important role in driving innovation in silicon carbide semiconductors."

The facility will be designed for breakthrough manufacturing processes to produce next-generation silicon carbide devices. The new fab will also feature innovative sustainability measures, including a high proportion of recycled water and a reduced emissions footprint, which will serve as a model for more sustainable fabs in the future. When fully operational, the plant will employ more than 600 people.

Adoption of silicon carbide power devices is growing rapidly in multiple markets, including renewable energy and energy storage, electric vehicles, charging infrastructure, industrial power supplies, traction and variable speed drives. Silicon carbide enables smaller, lighter and more cost-effective designs that convert energy more efficiently to enable countless new clean energy applications.

Wolfspeed and ZF announce collaboration to develop future silicon carbide semiconductor devices

Wolfspeed, Inc and ZF today announced a strategic partnership that includes the establishment of a joint innovation laboratory to drive the advancement of silicon carbide systems and devices for mobile, industrial and energy applications. The partnership also includes a significant investment from ZF to support plans to build the world's most advanced and largest 200mm silicon carbide device factory in Ensdorf, Germany.

“These initiatives are an important step towards a successful industrial transformation. They strengthen Europe’s supply resilience while supporting the strategic goals of the European Green Deal and the European Digital Decade,” said ZF CEO Dr. Holger Klein.

The strategic partnership includes a joint research facility in Germany that will focus on real-world electric vehicle and renewable energy system-level challenges. The goal of this collaboration is to develop breakthrough innovations for silicon carbide systems, products and applications, covering the entire value chain from chips to complete systems. Other partners will be invited to participate in the innovation process to establish an end-to-end European silicon carbide innovation network.

The R&D center will focus on the innovation of silicon carbide systems and equipment to meet specific requirements in all mobility segments, including consumer, commercial, agricultural and industrial vehicles as well as industrial and renewable energy markets. The collaboration will drive improvements in electrification solutions such as higher efficiency, higher power density and improved performance.

As mentioned earlier, Wolfspeed plans to build a fully automated, highly advanced 200mm wafer manufacturing facility in Saarland, Germany. ZF intends to support this new construction with a substantial financial investment of hundreds of millions of dollars in exchange for Wolfspeed common stock. As part of this investment, ZF will take a minority stake in the plant.

Wolfspeed will retain all operational and management control of the new facility. ZF and Wolfspeed previously announced a strategic partnership in 2019 to create industry-leading high-efficiency electric powertrains and silicon carbide inverters, and these new initiatives represent the next generation of innovation from the partners.

“We have a strong partner in ZF who brings industry-leading EV component scaling experience and the ability to accelerate silicon carbide system and power device innovation. I believe this partnership will bring silicon carbide to Semiconductor technology is elevating to a new level of global impact, supporting numerous industries' efforts to improve sustainability and efficiency," said Gregg Lowe, President and CEO of Wolfspeed.

"Wolfspeed and ZF combine expertise in power electronics and systems with applications expertise unparalleled in the industry. Wolfspeed brings more than 35 years of silicon carbide technology, and at ZF we have a unique view of total systems for all industries understanding - from passenger cars and commercial vehicles to construction machinery, wind power and industrial applications. Close cooperation between factories and R&D centers will enable us to develop breakthrough innovations beyond the state-of-the-art technology for the benefit of our customers. " said Stephan von Schuckmann, member of the ZF Management Board.

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