DURHAM – Shares in semiconductor firm Wolfspeed jumped 5% Wednesday after the company announced Mercedes has selected its chips for use in forthcoming electric vehicle drivetrains.

With the deal, Wolfspeed lands a powerful name in the global vehicle industry as the growth of EVs continues to accelerate.

The chips will help drive “greater efficiency.” Wolfspeed (NYSE: WOLF) noted.

The power devices will be made in Durham and New York and will equip “several” vehicle lines, Wolfspeed said.

Wolfspeed is gearing up for future growth with the new plant in New York state, an expanding operation in Durham and a future plant in Chatham County.

Financial terms were not disclosed but Wall Street investors made their feelings clear.

“Coming from a long-term technical collaboration history between our companies, we have now chosen Wolfspeed as one of our key partners for future Silicon Carbide devices, thus securing preferred long-term supply, technology and quality of this decisive semiconductor component for our electrification offensive,” said Dr. Gunnar Güthenke, head of procurement and supplier quality at Mercedes-Benz, in the announcement.

Wolfspeed lands $500M investment from global automotive giant BorgWarner

Wolfspeed ups drive for more capital to $1.5B after deal with BorgWarner

Greg Lowe, Wolfspeed’s CEO, hailed the deal.

“We are pleased to be supporting Mercedes-Benz, an organization with a long, successful history of providing world-class performance and luxury vehicles, as they introduce next-generation EVs to the market with highly efficient power systems,” he said in a statement.

“We are continuing to invest in our manufacturing capacity to support a steepening demand curve for Silicon Carbide devices that will not only improve EV performance and drive greater consumer adoption, but also support the sustainability efforts of global automotive leaders like Mercedes-Benz.”