Semiconductor Equipment

Wolfspeed to build first fab in Europe

07 February 2023
Wolfspeed is currently expanding its manufacturing to the tune of $6.5 billion that includes the new European fab in Germany and expansion of the 200mm Mohawk Valley factory shown here. Source: Wolfspeed

Wolfspeed Inc. plans to build its first semiconductor fab in Europe — a cutting-edge 200 mm wafer factory for silicon carbide (SiC) development and production in Saarland, Germany.

The European fab is part of Wolfspeed’s broader $6.5 billion capacity expansion effort that includes the opening of the company’s 200 mm Mohawk Valley device fab in April of last year and the construction of the John Palmour Manufacturing Center for Silicon Carbide in North Carolina. The Palmour center is a 445 acre SiC materials facility that will expand Wolfspeed’s existing materials capacity by more than 10 times.

The new fab will help support growing demand for a variety of automotive, industrial and energy applications and is part of a collaboration with the Important Project of Common European Interest (IPCEI) Microelectronics and Communication Technologies framework. The IPCEI funding is intended to support technology development and initial deployment of the project.

The German fab

The semiconductor fab in Germany will be on a 35 acre planned site that previously was home of a former coal-fired power plant. Fab construction is anticipated to begin in the first half of this year pending approval by the EU Commission.

The company held an event with German Chancellor Olaf Scholz and other German officials in attendance. Additionally, Wolfspeed has formed a strategic partnership with ZF — who were also in attendance at the event — which includes an investment in Wolfspeed as well as a joint SiC R&D facility in Germany that is also part of the same IPCEI framework.

“Silicon Carbide devices offer greater energy efficiency and are essential in the global shift toward sustainable electrification,” said Gregg Lowe, president and CEO of Wolfspeed. “This new facility will be crucial to supporting our expansion in a capacity constrained industry that is growing very rapidly, especially across the EV marketplace. It was important for us to have a facility located in the heart of Europe, near many of our customers and partners, to foster collaboration on the next generation of Silicon Carbide technologies.”

The fab will employ more than 600 people when fully operational and will employ sustainability measures such as recycled water and a reduced emission footprint.

Why it matters

The trend of regional semiconductor manufacturing is growing. Whereas chip making was aggregated in Asia primarily in past years, after the recent issues with the semiconductor supply chain arose after the outbreak of the COVID-19 pandemic, governments and companies looked to expand domestic chipmaking.

In the U.S., the CHIPS and Science Act was passed by President Biden after much deliberation in the U.S. Congress to provide more than $50 billion in incentives to build new manufacturing facilities domestically. The Act has already attracted more than 40 new semiconductor projects across the U.S. to the tune of $186.6 billion.

Meanwhile, the European Union passed its own version called the European Chips Act that would allow for $17 billion in additional and private investment by 2030 on top of the $34.3 billion of public investments already planned by EU agencies.

Wolfspeed also isn’t the only U.S. company investing in Germany as Intel pledged to spend more than $80 billion over the next decade on fabs and R&D including a leading-edge mega-site for semiconductor manufacturing in Magdeburg, Germany. Intel will also create a new R&D and design hub in France as well as invest in R&D, manufacturing and foundry services in Ireland, Italy, Poland and Spain.

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