Wolfspeed announces plan to spend up to $5 billion to chase demand in the EV business, with an initial investment of up to $2 billion for the world’s largest SiC plant.
Wolfspeed, the wide-bandgap chipmaker focused on silicon carbide and gallium nitride devices, plans to spend up to $5 billion to chase demand in the electric vehicle business that shows no signs of slowing down.
Today, the company is announcing an investment of up to $2 billion for the world’s largest silicon carbide plant. The facility will be located on the outskirts of Raleigh, North Carolina, near its corporate headquarters in the Research Triangle Park.
“It’s the next big step for Wolfspeed to be able to support not just our own internal needs, but also the needs of the burgeoning silicon carbide industry,” Rex Felton, Wolfspeed’s SVP of global operations, told EE Times. “It’s going to be a factory like no other. It’s silicon carbide (SiC), the second-hardest material known.”
In the new Raleigh facility, the company will grow SiC crystals at half the temperature of the sun. Wolfspeed will turn that material into 200-mm wafers for the company’s chip fab that opened earlier this year in New York state’s Mohawk Valley. The energy consumption of both facilities will be enormous.
“It was a key point of decision-making for us,” said Felton, the top engineer behind the expansion project. “We decided to be in New York. You’ve got this readily available, green-energy supply called Niagara Falls not too far away.”
In North Carolina, Duke Energy will provide strong support for what Felton calls “pretty hefty electrical demands coming from and supporting this facility.”
The company’s Mohawk Valley plant is the world’s first fully automated, 200-mm wafer fab, according to Felton.
“Totally lights out, which is not uncommon in the 300-mm world, right? But in the 200-mm world, we had to go back and kind of re-create some things. You didn’t have the same set of standards in 200 mm as you have in 300 mm.”
The nearly $2 billion project announced today will help the company catch up with demand for the next five years, internally and externally, he added.
The next step could take as many as 10 years and an investment of about $5 billion, Felton said. The company expects to create about 1,800 jobs.
The movement toward electrification of cars and other vehicles is driving demand for Wolfspeed. Felton, who has been visiting car OEMs around the world, names General Motors and luxury EV maker Lucid as partners.
The power metal–oxide–semiconductor field-effect transistors (MOSFETs) from Wolfspeed go into inverters that are critical for EV driving range, performance, and charging time. The company is beginning to see a growth in business for inverters for solar energy. In 2021, Wolfspeed had 42% year-over-year revenue growth, and the company still hasn’t been able to keep up with demand.
“We’re going to be chasing demand for the next five to 10 years,” Felton said. “We built this big factory up in New York. We believe it’s going to be sold out in four years. It’s pretty much sold out.”
The recently passed U.S. CHIPS Act provides incentives that helped clinch the Wolfspeed investment announcement today. The federal incentives will be smaller than those used by state and local governments to close final agreements, according to Felton.
The company will most likely realize about $1 billion in local tax incentives in the state of New York. For Wolfspeed’s $5 billion project, local incentives will probably quadruple those from the CHIPS Act.
“If we get $1 billion from local governments, you might be expecting to see $200 to $300 million out of the CHIPS Act,” he said.
The U.S. incentives have clearly spurred momentum in building more factories, according to Felton.
While the outlook for EVs and solar energy is positive, growth could be constrained by future shortages of raw materials.
“There can be competition, no doubt about it, not just within the semiconductor industry but in other industries, as well,” Felton said. “We’ve really strengthened a lot of our supply chain team recently. I feel very good about a lot of the long-range agreements that we’ve struck with a number of the folks that supply our raw materials.”
Growth may also be constrained by the controls recently announced by the U.S. government on exports of wide-bandgap materials to China. The U.S. restrictions include substrates of gallium oxide and diamond. Wolfspeed makes silicon carbide and gallium nitride materials.
Despite potential downsides, there’s plenty of demand for EVs and solar panels around the world, Felton said.
“The good thing is having such a healthy design queue,” he added. “We have certainly enough to pivot to in order to keep ourselves plenty busy.”
This article was originally published on EE Times.
Alan Patterson has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.