Cree and ST increase total price of existing silicon carbide wafer supply agreement and extend agreement

Cree Inc. and STMicroelectronics (ST; NYSE: STM), a leading global semiconductor supplier across multiple electronic applications, announced on the 19th that the two parties will increase the total price of the existing multi-year long-term supply agreement for silicon carbide (SiC) wafers to more than $500 million and extend the validity period of the agreement. This extended supply agreement doubles the total price of the original contract. According to the agreement, Cree will provide STMicroelectronics with advanced 150mm silicon carbide bare die and epitaxial wafers in the next few years. Increasing wafer supply allows market-leading semiconductor manufacturer STMicroelectronics to meet the rapidly growing demand for silicon carbide power devices in the global market, especially in automotive and industrial applications.

“Increasing the total value of our long-term wafer supply agreement with Cree will provide us with greater flexibility in the global supply of silicon carbide substrates,” said Jean-Marc Chery, President and CEO of STMicroelectronics. “We are seeing an increasing number of project wins from automotive and industrial customers that will require us to increase our SiC production in the coming years, and this extended agreement will provide us with greater security in our total substrate supply.”

“The performance improvements enabled by silicon carbide are critical for electric vehicles and next-generation industrial solutions such as solar, energy storage and UPS systems,” said Gregg Lowe, CEO of Cree. “Cree remains committed to leading the semiconductor industry’s technology transition from silicon to silicon carbide, and this extended supply agreement with STMicroelectronics ensures we can meet the growing demand for this solution across a wide range of applications around the world while helping to grow the silicon carbide market.”

The adoption rate of silicon carbide-based power solutions in the entire automotive market is increasing rapidly as the industry seeks to accelerate the industry's transition from internal combustion engines to electric vehicles, improve system efficiency, enable electric vehicles to have longer driving range and faster charging speeds, while reducing costs, reducing vehicle weight and saving space. In the industrial market, silicon carbide modules enable smaller, lighter and more cost-effective inverters, convert energy more efficiently, and open up new clean energy applications.