DURHAM – Wolfspeed will construct a new semiconductor production facility in Germany, adding to expansion plans recently announced for a plant in Chatham County. A German firm also is buying “hundreds of millions of dollars” in Wolfspeed stock in a deal to help fund the latest facility.
Wolfspeed stock (NYSE: WOLF) climbed more than 6% on the news to $81.61 as of 2:30 eastern time on Wednesday.
The facility – or “fab” – “will be the world’s largest, utilizing innovative manufacturing processes to produce next-generation Silicon Carbide devices,” the Durham-based chip and power supply company says.
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A ‘significant’ investment to facilitate the expansion
CEO Gregg Lowe had recently hinted at more expansion plans, citing growing demand for its silicon carbide chips.
The latest deal also includes a partnership with ZF, a global tech firm based in Germany. The two companies say they will partner to launch an innovation lab focusing on Silicon Carbide development.
Wolfspeed described ZF’s investment as “significant.”
The ZF investment is described by Wolfspeed as a “sizable financial investment in the hundreds of millions of dollars in exchange for Wolfspeed common stock.” Wolfspeed will maintain control of the new fab but ZF will have an ownership stake, the companies said.
“We have a strong partner by our side in ZF, which brings industry-leading experience in scaling components for electric mobility as well as the aptitude to accelerate innovation in Silicon Carbide systems and power devices. I am confident this partnership will lift Silicon Carbide semiconductor technology to a new level of global impact, supporting increased sustainability and efficiency efforts across a multitude of industries,” Lowe said.
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The Germany-located facility is part of a $6.5 billion expansion plan that also includes growth at facilities in Durham and New York state.
“This new fab represents a big step forward for both Wolfspeed and our regional customers, as we enhance the ecosystem for semiconductor production and innovation,” Lowe said in a statement. “Silicon Carbide devices offer greater energy efficiency and are essential in the global shift toward sustainable electrification. This new facility will be crucial to supporting our expansion in a capacity constrained industry that is growing very rapidly, especially across the EV marketplace. It was important for us to have a facility located in the heart of Europe, near many of our customers and partners, to foster collaboration on the next generation of Silicon Carbide technologies.”
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