Vitesco Technologies and Onsemi have signed a 10-year supply agreement for silicon carbide (SiC) semiconductors, which will help Vitesco ramp its electrification technologies.
The agreement, which is said to be worth $1.9 billion, includes a $250 million investment from Vitesco to Onsemi for new equipment for use in SiC boule growth, wafer production and epitaxy. This will help Vitesco to secure access to SiC capacity for the near- and long-term.
Because of this, Onsemi said it will continue to invest substantially into end-to-end SiC supply chain. This includes a potential $2 billion investment to expand production of SiC semiconductors either at its Czech Republic or South Korea locations where the company already has fabs.
In the meantime, Onsemi is rapidly expanding agreements with companies that are developing products for the automotive transition to electrification. These companies are securing SiC chips due to the rapid expansion of electric vehicles (EVs) and EV chargers like the deal Onsemi made with Kempower earlier this year.
Vitesco will use Onsemi’s EliteSiC MOSFETs for projects for traction inverters and EV drives.
“Energy-efficient silicon carbide power semiconductors are at the beginning of a big surge in demand,” said Andreas Wolf, CEO of Vitesco. “That is why it is imperative for us to get access to the complete SiC value chain together with Onsemi. With this investment we have a secure supply of a key technology over the next ten years and beyond.”
SiC semiconductors are a pivotal technology for electrification enabling highly efficient power electronics leading to reduced charging times and longer range for electric cars. Especially at high voltage levels such as 800 V, SiC inverters are more efficient than silicon models. Since 800 V is the prerequisite for fast and thus convenient high-voltage charging, SiC devices are at the beginning of a worldwide boom.
Rising demand
SiC semiconductors are used to reduce charging times and enable a longer range for EVs. At high voltage levels such as 800 V — which is key for fast charging — SiC inverters are more efficient than silicon models, Onsemi said.
So not surprisingly, demand for SiC chips is rising rapidly in response to the transition in the automotive industry to electrification. Over the next 10 to 15 years, automotive OEMs have pledged to convert most of their fleets to electrified models due to the goal to fight climate change and answer to consumer demand that is rising for EVs.
Not surprisingly, the market for SiC power devices is forecast to grow to $2.28 billion this year — a 41.4% year-over-year growth — and is forecast to reach $5.33 billion by 2026, according to TrendForce.
The market research firm said the highest growth markets for SiC devices are in EVs and renewable energy sectors.
