TOKYO – Renesas, Japan’s top maker of automotive chips, has reached a 10-year supply agreement with America’s Wolfspeed, the world’s leading producer of the silicon carbide wafers used to make power semiconductors.
Both companies have ambitious plans to meet rapidly growing demand for electric vehicles (EVs) and charging infrastructure, renewable energy generation and storage, and industrial motor control and other power management.
A US$2 billion deposit from Renesas will support Wolfspeed’s capacity expansion plans in the state of North Carolina. Meanwhile, a guaranteed supply of Wolfspeed-made wafers will support Renesas’ power device manufacturing in Japan. The agreement was signed at Renesas’ headquarters in Tokyo on July 5.
Wolfspeed CEO Gregg Lowe said that “With the steepening demand for silicon carbide across the automotive, industrial and energy sectors, it’s critically important we have best-in-class power semiconductor customers like Renesas to help lead the global transition from silicon to silicon carbide.”
Renesas CEO Hidetoshi Shibata said, “The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This empowers Renesas to scale our power semiconductor offerings to better serve customers’ vast array of applications. We are now poised to elevate ourselves as a key player in the accelerating silicon carbide market.”
Compared with silicon, silicon carbide offers greater energy efficiency and reliability through resistance to higher voltages, tolerance of a wider range of temperatures and vibration, and longer device lifetimes. As production volumes rise and prices fall, the use of silicon carbide should also lead to lower power management system costs.
Wolfspeed, formerly known as Cree, has been making silicon carbide wafers and power devices for more than 35 years. It also produces radio frequency devices and gallium nitride materials. Its products are used in communications infrastructure, satellite communications, aerospace and defense.
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 big new silicon carbide materials facility in North Carolina that aims to boost production by more than 10 times by 2030.
This is in line with market research organizations’ forecasts of the silicon carbide market’s potential.
Phase one of the North Carolina facility, estimated at $1.3 billion is scheduled for completion in 2024. Industry sources estimate Wolfspeed’s share of the silicon carbide wafer market at more than 60%.
200mm wafers are 1.7x larger than the 150mm (6-inch) wafers that were previously the silicon carbide industry standard. Larger wafers mean more chips per wafer and a lower cost per chip. Wolfspeed will supply Renesas first with 150mm wafers and then with 200mm wafers as its production capacity increases.
Renesas manufactures semiconductor products for automotive, industrial, infrastructure, internet of things (IoT) and other applications. It is a world leader in microcontrollers for the auto industry.
The Japanese company also possesses 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 start making power semiconductors on 300-mm (12-inch) silicon wafers there in 2024.
In 2025, the company plans to start mass production of silicon carbide devices with wafers procured from Wolfspeed at its factory in Takasaki. At present, the Takasaki factory makes silicon power devices.
Renesas has doubled its revenues over the past five years, with growth in the auto, industrial, infrastructure and IoT markets accelerated by six acquisitions, namely:
- Integrated Device Technology of the US, which makes mixed-signal semiconductors used in telecom, computing and consumer electronics
- Dialog Semiconductor of the UK, which produces power management, Wi-Fi, Bluetooth and industrial computing chips
- Celeno Communications of Israel, which specializes in WiFi chipsets and software
- Reality Analytics of the US, which is involved in software combining signal processing, machine learning and anomaly detection on Renesas MCU/MPU cores
- Steradian Semiconductors of India, which is involved in 4D imaging radar for object recognition and power efficiency in Renesas Advanced Driver Assistance System SoCs
- Panthropics of Austria, which specializes in Near Field Communications semiconductor design
Leveraging these strategic acquisitions, Renesas now plans to become a big producer of both silicon and silicon carbide power devices.
Their synergy with the company’s existing products and strong market demand point toward substantial growth ahead. Investors certainly 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 Act, CEO Shibata told the press that Renesas does not plan to make semiconductors in the US.
“When it comes to front-end production [the manufacture of chips on wafers],” he said, “I don’t necessarily believe there are good supplies of ingredients in geographies like Europe or the US”
By “ingredients,” he seems to have meant high costs and shortage of skilled labor – the same issues chip-making giant TSMC has been complaining about in Arizona.
Buying silicon carbide wafers from Wolfspeed, on the other hand, apparently makes more commercial sense to 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 run by Japan’s New Energy and Industrial Technology Development Organization (NEDO). Despite handsome government support, they did not win the Renesas contract.
Rohm, one of Japan’s leading makers of power devices, 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 maker of electrified vehicle drive systems. This deal, too, appears to be economic rather than political.
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