Global Courant
TOKYO – Renesas, Japan’s largest manufacturer of automotive chips, has signed a 10-year supply agreement with US-based Wolfspeed, the world’s largest producer of the silicon carbide wafers used to make power semiconductors.
Both companies have ambitious plans to meet the rapidly growing demand for electric vehicles (EVs) and charging infrastructure, renewable energy generation and storage, and industrial motor control and other energy management.
A $2 billion down payment from Renesas will support Wolfspeed’s North Carolina capacity expansion plans. Meanwhile, a guaranteed supply of Wolfspeed-made wafers will support production of Renesas’ power devices in Japan. The agreement was signed on July 5 at Renesas’ headquarters in Tokyo.
Wolfspeed CEO Gregg Lowe said: “With demand for silicon carbide rising in the automotive, industrial and energy sectors, it is critical that we have the best power semiconductor customers like Renesas to lead the global transition from silicon to silicon carbide. ”
Hidetoshi Shibata, CEO of Renesas, said: “The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-performance silicon carbide wafers. This enables Renesas to scale our power semiconductor offerings to better serve customers’ broad range of applications. We are now ready to establish ourselves as a major player in the accelerating silicon carbide market.”
Compared to silicon, silicon carbide offers greater energy efficiency and reliability through resistance to higher voltages, tolerance to a wider temperature and vibration range, and longer device life. As production volumes increase and prices decrease, the use of silicon carbide should also lead to lower energy management system costs.
Wolfspeed, formerly known as Cree, has been making silicon carbide wafers and power devices for over 35 years. It also produces radio frequency devices and gallium nitride materials. The products are used in communications infrastructure, satellite communications, aerospace and defense.
The silicon carbide 200mm wafer from American power chip maker Wolfspeed is on display at Wolfspeed’s Mohawk Valley Fab in Marcy, New York, April 2022. Silicon carbide power chips are gaining popularity among electric car manufacturers because they can withstand high voltages and be more energy efficient. Photo: Wolfspeed handout
In April 2022, Wolfspeed opened the world’s first 200mm (8-inch) silicon carbide wafer factory in New York. In September 2022, the company announced plans to build a major new silicon carbide materials plant in North Carolina, which aims to increase production more than 10 times by 2030.
This is in line with the forecasts of market research organizations about the potential of the silicon carbide market.
Phase one of the North Carolina facility, valued at $1.3 billion, is expected to be completed by 2024. Industry sources estimate Wolfspeed’s share of the silicon carbide wafer market to be over 60%.
200 mm wafers are 1.7x larger than the 150 mm (6 in) wafers that were previously the industry standard for silicon carbide. Larger wafers mean more chips per wafer and lower cost per chip. Wolfspeed will supply Renesas with 150mm wafers first and then 200mm wafers as production capacity increases.
Renesas produces semiconductor products for automotive, industrial, infrastructure, internet of things (IoT) and other applications. It is a world leader in microcontrollers for the automotive industry.
The Japanese company also has embedded processing, analog, power management, radio frequency, SoC (system-on-chip) and other semiconductor technologies.
In May 2022, Renesas announced plans to refurbish and reopen its old Kofu factory and begin making power semiconductors on 300 mm (12 in) silicon wafers there in 2024.
In 2025, the company plans to begin mass production of silicon carbide devices using wafers purchased from Wolfspeed at its plant in Takasaki. Currently, the Takasaki factory is making silicon power devices.
Renesas has doubled its revenue in the past five years, accelerating growth in the automotive, industrial, infrastructure and IoT markets through six acquisitions, namely:
Integrated Device Technology of the US, which makes mixed-signal semiconductors used in telecoms, computers and consumer electronics Dialog Semiconductor of the UK, which produces power management, Wi-Fi, Bluetooth and industrial computer chips Celeno Communications of Israel, which specializes in Wi-Fi chipsets and software Reality Analytics of the US, involved in software that combines signal processing, machine learning and anomaly detection on Renesas MCU/MPU cores Steradian Semiconductors of India, involved in 4D image radar for object recognition and energy efficiency in Renesas Advanced Driver Assistance System SoC’s Pananthropics of Austria, specializing in Near Field Communications semiconductor design
Leveraging these strategic acquisitions, Renesas now plans to become a major producer of both silicon and silicon carbide power devices.
Their synergy with the company’s existing products and strong market demand point to substantial growth ahead. Investors think so: Renesas’ share price is up 2.3 times so far this year.
In July 2022, less than a month before President Joe Biden signed the CHIPS bill into law, CEO Shibata told the press that Renesas has no plans to make semiconductors in the US.
“When it comes to front-end manufacturing (the production of chips on wafers),” he said, “I don’t necessarily believe there are good stocks of ingredients in regions like Europe or the US.”
By “ingredients,” he seems to have meant high costs and a shortage of skilled labor — the same problems that Arizona chipmaker TSMC complains about.
Renesas would rather not operate a factory in the US. Image: Twitter
On the other hand, purchasing silicon carbide wafers from Wolfspeed apparently makes more commercial sense for Renesas than sourcing them from smaller and less experienced manufacturers in Japan.
These companies, including Showa Denko, Central Glass, Mipox and Oxide, are part of a silicon carbide development project led by Japan’s New Energy and Industrial Technology Development Organization (NEDO). Despite substantial government support, they did not win Renesas’ contract.
Rohm, one of Japan’s leading makers of electrical appliances, relies on SiCrystal, a German company it acquired in 2010, for its silicon carbide wafers. SiCrystal also sells wafers to other companies.
On June 29, Rohm signed a long-term agreement to supply silicon carbide power semiconductors to Vitesco Technologies, a German manufacturer of electrified vehicle propulsion systems. This deal also seems more economic than political.
Follow this writer on Twitter: @ScottFo83517667
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