DURHAM – Wolfspeed is getting a $500 million investment from BorgWarner as part of an offering of notes worth as much as $1.5 billion that was announced earlier Wednesday.

BorgWarner, which provides a variety of “mobility solutions” for vehicles, secures as well the rights to purchase “up to $650 million of devices annually” from the Durham-based chip producer, the companies said.

Michigan-based BorgWarner is one of the world’s top automotive suppliers with nearly 50,000 employees spread across 22 operations in 22 countries.

Despite news of the BorgWarner deal Wolfspeed (NYSE: WOLF) traded down slightly in pre-market trading.

“Silicon carbide-based power electronics play an increasingly important role for our customers as our electric vehicle business continues to accelerate,” said Frédéric Lissalde, CEO of BorgWarner, in the announcement. “We believe this agreement helps ensure that BorgWarner will have a reliable supply of high-quality silicon carbide devices, which are significant to the company’s inverter growth plans. Building upon BorgWarner’s world-class Viper power switches and inverter technology, we are excited about the opportunity to work jointly with Wolfspeed, the leader in silicon carbide, on the potential development of the next generation of silicon carbide products. We believe our relationship with Wolfspeed will drive innovation, accelerate the global transition to electric vehicles, and further BorgWarner’s vision for a clean, energy-efficient world.”

Wolfspeed recently opened a new microchip plant in New York and is building a new plant in Chatham County, N.C.

“Today’s announcement demonstrates the creative solutions two collaborative and strategic partners are pursuing to better support the growing demand for silicon carbide devices. BorgWarner has been a strong partner with Wolfspeed for many years, and we are pleased to secure the investment from them which will be used to support our capacity expansion efforts and ensure we have a steady supply of product for their customers,” said Gregg Lowe, CEO for Wolfspeed. “This agreement, combined with our most recent announcement of a multi-billion-dollar materials expansion in North Carolina, confirms the industry transition from silicon to silicon carbide is well underway.”

Wolfspeed, which is building huge chip plant in NC, looks to raise up to $1.5 billion