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Silicon Carbide Shift: Wolfspeed’s $2bn Deal with Renesas Spurs EV Semiconductor Evolution

In a deal highlighting the vital role of silicon carbide (SiC) in the burgeoning electric vehicle (EV) market, Wolfspeed, a leading US-based power semiconductor company, has inked a ten-year supply contract with Japanese automotive semiconductor giant, Renesas Electronics.

Details of the transaction, slated to commence in 2025, remain under wraps. However, industry insiders believe it to be a substantial agreement given the upfront payment of $2bn, reportedly to bolster Wolfspeed’s production capabilities.

SiC, with its energy band gap three times broader and a dielectric breakdown field value over ten times higher than conventional silicon (Si), is emerging as the go-to semiconductor material for EVs, performing optimally even under extreme conditions such as high temperatures and thousands of volts.

The contract stipulates Wolfspeed’s delivery of SiC epitaxial wafers to Renesas, a prerequisite brought about by the inherent non-conductive properties of SiC wafers. To facilitate electrical conduction, the wafers undergo a transformation via chemical vapour deposition (CVD).

Wolfspeed, globally recognised as the dominant force in SiC power semiconductors with a 62% market share, boasts an unrivalled vertical integration from wafers to devices and modules. Its market prominence is a decisive factor for Renesas in establishing this long-term wafer supply contract.

Renesas, who announced plans in May to kick off mass production of SiC power semiconductors by 2025, appears to be straying from its previous ‘fab light’ strategy of leveraging external foundries for high-tech semiconductor production. The deal with Wolfspeed is seen as the company’s first step away from the ‘fab light’ approach.

With the $2bn advance, Wolfspeed plans to increase the wafer production capacity of its Durum plant and the yet-to-be-built ‘John Palmur (JP) Center’. The supply of 6-inch SiC wafers is expected to commence in 2025, with the provision of 8-inch wafers anticipated in 2030 upon completion of the JP Center, Wolfspeed’s largest wafer production base, located in Chatham County, North Carolina.

CEO of Renesas, Hidetoshi Shibata, hailed the contract as a milestone in securing a stable supply of SiC wafers, thereby bolstering Renesas’ future standing in the fast-growing SiC power semiconductor market.

TrendForce, a market research firm, has predicted a sharp rise in the SiC power semiconductor market, expecting it to surge from $1.69bn last year to $5.328bn in 2026.

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