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Wolfspeed, Inc. issued the following statement regarding the recent decision by the Chinese Ministry of Commerce to restrict the export of gallium and germanium which is scheduled to take effect on August 1, 2023. The statement can be attributed to Wolfspeed spokesperson Melinda Walker.
“Following an internal review, the company has confirmed that its supply chain will not be impacted by the proposed export restrictions on gallium and germanium. Wolfspeed strives to manage its supply chain with our supply partners through principles such as quality, availability, social responsibility, and cost. We appreciate that global events can lead to dynamic market conditions that will require us to periodically review our supply chain, and we will continue to do so to ensure Wolfspeed’s needs are fulfilled.”
Original – Wolfspeed
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Renesas Electronics Corporation and Wolfspeed, Inc. announced the execution of a wafer supply agreement and $2 billion (USD) deposit by Renesas to secure a 10 year supply commitment of silicon carbide bare and epitaxial wafers from Wolfspeed. The supply of high-quality silicon carbide wafers from Wolfspeed will pave the way for Renesas to scale production of silicon carbide power semiconductors starting in 2025. The signing ceremony of the agreement was held at Renesas’ headquarters in Tokyo between Hidetoshi Shibata, President and CEO of Renesas, and Gregg Lowe, President and CEO of Wolfspeed.
The decade-long supply agreement calls for Wolfspeed to provide Renesas with 150mm silicon carbide bare and epitaxial wafers scaling in CY2025, reinforcing the companies’ vision for an industry-wide transition from silicon to silicon carbide semiconductor power devices. The agreement also anticipates supplying Renesas with 200mm silicon carbide bare and epitaxial wafers after the recently announced John Palmour Manufacturing Center for Silicon Carbide (the “JP”) is fully operational.
The need for more efficient power semiconductors, which supply and manage electricity, is dramatically increasing throughout automotive and industrial applications, spurred by the growth of electric vehicles (EVs) and renewable energy. Renesas is moving quickly to address the growing demand for power semiconductors by expanding its in-house manufacturing capacity. The company recently announced the restart of its Kofu Factory to produce IGBTs, and establishment of a silicon carbide production line at its Takasaki Factory.
Compared to conventional silicon power semiconductors, silicon carbide devices enable higher energy efficiency, greater power density and a lower system cost. In an increasingly energy-conscious world, the adoption of silicon carbide is becoming ever more pervasive across multiple high-volume applications spanning EVs, renewable energy and storage, charging infrastructure, industrial power supplies, traction and variable speed drives.
“The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This empowers Renesas to scale our power semiconductor offerings to better serve customers’ vast array of applications,” said Hidetoshi Shibata, President and CEO of Renesas. “We are now poised to elevate ourselves as a key player in the accelerating silicon carbide market.”
“With the steepening demand for silicon carbide across the automotive, industrial and energy sectors, it’s critically important we have best-in-class power semiconductor customers like Renesas to help lead the global transition from silicon to silicon carbide,” said Gregg Lowe, President and CEO of Wolfspeed. “For more than 35 years, Wolfspeed has focused on producing silicon carbide wafers and high-quality power devices, and this relationship marks an important step in our mission to save the world energy.”
The Renesas $2 billion deposit will help support Wolfspeed’s ongoing capacity construction projects including the JP, the world’s largest silicon carbide materials factory in Chatham County, North Carolina. The state-of-the-art, multi-billion-dollar facility is targeted to generate a more than 10-fold increase from Wolfspeed’s current silicon carbide production capacity on its Durham, North Carolina campus. The facility will produce primarily 200mm silicon carbide wafers, which are 1.7x larger than 150mm wafers, translating into more chips per wafer and ultimately, lower device costs.
Original – Renesas Electronics
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Wolfspeed, Inc. announced a $1.25 billion secured note financing from an investment group led by Apollo, with an accordion feature for up to an additional $750 million.
The financing supports the company’s previously announced U.S. expansion efforts and is a significant step toward achieving the company’s $6.5 billion global capacity expansion plan. Execution of Wolfspeed’s U.S. growth plan will accelerate adoption of silicon carbide across a wide array of end markets and support meaningful job creation in US semiconductor manufacturing.
The 9.875% notes will mature in 2030 and are optionally prepayable by the company based on the terms of the indenture governing the notes. The investment was led by funds managed by Apollo’s ~$450 billion Credit business.
“The group’s commitment to Wolfspeed further validates the importance of silicon carbide to the global energy transition,” said Gregg Lowe, president and chief executive officer of Wolfspeed. “This important step in our financing provides significant capital to scale up near-term operations at our Mohawk Valley Fab and construction of our Siler City materials facility to help us capture the growing silicon carbide market opportunity. The financing positions Wolfspeed to continue to lead the growth of the industry and focus on the execution of our vertically integrated strategy to meet growing demand.”
“Our agreement with Apollo and its capital partners achieves our near-term funding targets while prioritizing our shareholders with a new, non-dilutive source of financing,” said Neill Reynolds, chief financial officer of Wolfspeed. “Apollo and its capital partners’ investment follows an extensive review of our business and demonstrates their conviction in our team, operating plan and trajectory.”
“Apollo is pleased to provide a dynamic and flexible credit solution to Wolfspeed as it significantly expands its silicon carbide manufacturing capacity. The company’s growth plan is designed to deliver critical silicon carbide products for a range of automotive and industrial uses, and support sustainability goals with market-leading technology,” said Joseph Jackson, Partner, Apollo Credit. “With the help of our capital partners, we have crafted a facility that can provide up to $2 billion to ramp the company’s expansion plans.”
Wells Fargo & Company (NYSE: WFC) and Morgan Stanley & Co. LLC served as financial advisors to Wolfspeed and Latham & Watkins LLP and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. served as legal counsel to Wolfspeed. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to the Apollo funds and the noteholder group. Apollo Capital Solutions provided capital markets and structuring advisory services on the transaction.
Original – Wolfspeed
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As part of their strategic partnership announced earlier this year, ZF Friedrichshafen AG, a leading global technology company of next generation mobility, and Wolfspeed Inc, the global leader in Silicon Carbide technology, announced their plans to establish a joint European R&D center for Silicon Carbide power electronics in the Nuremberg Metropolitan Region.
The new joint research facility is supported by the German federal government and the regional government of Bavaria. Like the planned Wolfspeed Silicon Carbide chip factory in Ensdorf, Saarland, funding for the new center is subject to approval by the European Commission under the EU’s Important Project of Common European Interest (IPCEI) scheme, as well as antitrust authorities. The aim is to develop the two facilities to become the cornerstone of a new European Silicon Carbide technology network.
Construction will begin after IPCEI funding approval has been secured for both projects, which is expected later this year. The goal of the collaboration is to develop breakthrough innovations for Silicon Carbide systems, products, and applications, covering the full value chain from module to complete systems and thus reducing time-to-market significantly. The joint research center will target requirements in all mobility segments including consumer, commercial, agricultural, and industrial vehicles, as well as in the industrial and renewable energy markets. The collaboration aims to drive improvements such as higher efficiency, increased power density and higher performance of electrification solutions. Wolfspeed’s Silicon Carbide expertise and ZF’s access to all mobility segments allows for a fast and seamless transition of new technologies.
ZF and Wolfspeed are partnering with other leading organizations from the scientific and industrial communities to establish a comprehensive European Silicon Carbide technology network. To this end, ZF will use its membership in the European Center of Power Electronics (ECPE) and share key research results at the European level. Over time, the research center is planned to develop into an electronics and semiconductor campus.
“The research center is of outstanding importance for the energy and mobility transition in the EU and supports the strategic goals of Europe,” says Dr Holger Klein, CEO of ZF. “In addition, optimizing Silicon Carbide technology advances industrial transformation and strengthens the independence of European supply chains.”
“This research facility further strengthens our partnership with ZF and underlines our long-term commitment to turn our unique know-how from more than 35 years of experience in Silicon Carbide power electronics into state-of-the-art solutions for our industry partners,” comments Gregg Lowe, CEO of Wolfspeed Inc.
The strategic partnership links ZF, one of the world’s leading suppliers of electric drives, with Wolfspeed, the world’s most recognized specialist in Silicon Carbide technology. “This connection is unique and will lead to enormous advances in Silicon Carbide-based electrical systems and electric drives,” says ZF Board of Management member Stephan von Schuckmann. “This is made possible by the close networking of the research center and production, because fundamentally redesigned Silicon Carbide chips also require new production processes.”
Original – Wolfspeed
