Looking to guarantee a supply of silicon carbide (SiC) on silicon wafers, Denso Corp. has made a long-term investment in Silicon Carbide LLC, a division of Coherent Corp.
It was reported last month that several Japanese conglomerates were looking at investing in Coherent due to the anticipated demand for SiC semiconductor for use in electric vehicles (EVs) and renewable energy like solar and wind.
SiC semiconductor demand is at fever pitch due to increasing investments in renewable energy and the ongoing transition of the automotive industry to all electrified fleets in the next 10 to 15 years. Because of this, automotive OEMs and other companies playing in these markets are making long-term strategic investments to guarantee supplies of SiC chips.
This includes a 10-year deal by Onsemi and Vitesco; a $2 billion investment between Onsemi and Kempower; Infineon’s multi-year deal with Kia and Hyundai; Renesas Electronic and Wolfspeed’s SiC wafer deal; and more.
Additionally, several chipmakers are expanding semiconductor manufacturing in hopes of demand soaring, including Bosch, Wolfspeed, Texas Instruments and ST Microelectronics.
The deal
Under the $500 million deal, Silicon Carbide LLC will be spun off into an independent subsidiary and Denso will hold a 12.5% equity stake.
Denso will secure a stable procurement of quality 150 mm and 200 mm SiC wafers for its automotive inverters, which drive and control motors for EVs.
After reviewing its strategic alternatives for SiC chips, it determined that a separate subsidiary and strategic investment was necessary to position the company for future long-term growth, said Vincent D. Mattera, chairman and CEO of Coherent.
Denso is also looking to accelerate its own capacity expansion plans to ensure the development of a scalable supply of SiC-based power electronics, Mattera added.
