Infineon takes on Wolfspeed for world’s largest SiC fab in €5bn battle

Infineon takes on Wolfspeed for world’s largest SiC fab in €5bn battle

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By Nick Flaherty

Infineon Technologies is looking to overtake Wolfspeed with the world’s largest fab making silicon carbide (SiC) devices.

Chip makers around the world are moving fast to secure supplies of silicon carbide power devices as Infineon and Wolfspeed compete for the title of the world’s largest SiC fab. Onsemi and Rohm as also looking to boost production of SiC devices with huge advanced payments and all are making deals for the supply of wafers to feed the fabs.  

Over the next five years Infineon will invest up to €5bn into its fab in Kulim, Malaysia, during a second construction phase for Module Three. This is over and above the original investment announced in February 2022 and will create the world’s largest 200mm SiC plant says the company.

The planned expansion is backed by customer commitments covering about €5bn new design-wins in automotive and industrial applications as well as about €1bn in pre-payments from customers including Schneider Electric in France

This comes as Renesas this week confirms it has paid the first tranche of $1bn to Wolfspeed for these power devices, to be followed by another billion dollars next year.

The investment at Infineon will lead to an annual SiC revenue potential of about €7bn by the end of the decade, together with the planned 200mm conversion of the Villach and Kulim fabs to SiC production. This aims to enable a market share target of 30% towards the end of the decade. Infineon is confident that the company’s SiC revenue in the fiscal year 2025 will come in ahead of the target of one billion euros.

“Over the last years, the use of silicon carbide-based solutions has shown a huge increase,” said Jochen Hanebeck, CEO of Infineon. “As the energy transition continues to accelerate, the SiC market is following suit and developing clearly above projections. We want to leverage this development and drive decarbonization together with our customers who have signalled us their long-term need with an incremental design-win volume of over €5bn in automotive and industrial applications as well as around €1bn of related pre-payments.” 

“That’s why we have decided to significantly increase the ongoing expansion of our site in Kulim. With an additional investment of up to €5bn, it will become the by far world’s largest 200mm production facility for SiC,” he said.

This will compete with Wolfspeed’s fully automated 200mm fab in Mohawk Valley, New York State, which ran its first wafers in May. This has a pipeline of $20bn of orders, says the company, although neither company is giving the number of wafer starts for their fabs which would allow a direct comparison. 

The trench architecture of the SiC devices is key for Infineon, he says.

“The market for silicon carbide shows accelerating growth, not only in automotive but also in a broad range of industrial applications such as solar, energy storage and high-power EV charging. With the Kulim expansion, we will secure our leadership position in this market,” said Hanebeck. “We are leveraging our competitive position of best-in-class SiC trench technology, the broadest package portfolio and unrivaled application understanding. These factors are the areas of differentiation and success in the industry.”

Infineon has six automotive OEM customers for the technology, with three of them from China. Among the customers are Ford, SAIC and Chery, as well as SolarEdge and three leading Chinese photovoltaic and energy storage systems companies in renewable energy.

Schneider Electric has agreed on a capacity reservation including prepayments for power products based on silicon and silicon carbide, with more details in separate announcements in the near future.

And onsemi has seen long term supply deals for over $2bn for devices for automotive and renewable energy applications. This even included Tier One supplier Magna buying semiconductor equipment for its plants in the Czech Republic, where trench device technology is being developed.

Advanced payments from customers for SiC fab development is helping the cash flow of chip makers significantly at a time the semiconductor market is softening. This is helping the power industry to avoid the cycles of the rest of the market, and boosting capacity in time for the huge growth in electric vehicles and renewable energy applications, from solar farms and wind turbines to inverters for battery energy storage systems.;;;

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