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16 November 2022

BorgWarner investing $500m in Wolfspeed’s financing transaction

Wolfspeed Inc of Durham, NC, USA – which makes silicon carbide materials as well as silicon carbide (SiC) and gallium nitride (GaN) power-switching & RF semiconductor devices – has announced a multi-year strategic partnership in which BorgWarner Inc of Auburn Hills, MI, USA (which provides sustainable mobility solutions for the vehicle market) will invest $500m in its financing transaction, in exchange for being entitled to purchase up to $650m of silicon carbide devices annually as BorgWarner’s requirements increase.

“Silicon carbide-based power electronics play an increasingly important role for our customers as our electric vehicle business continues to accelerate,” notes BorgWarner’s president & CEO Frédéric Lissalde. “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,” he adds. “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.”

BorgWarner’s Charging Forward strategy targets $4.5bn of electric vehicle revenue for 2025, up from less than $350m in 2021. Based on new business awards and acquisitions announced as of the firm’s third-quarter earnings release, BorgWarner believes it is already on track to achieve about $4bn of electric vehicle revenue by 2025.

“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,” says Wolfspeed’s president & CEO Gregg Lowe. “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.”

At its Investor Day in October, Wolfspeed outlined a multi-year $6.5bn capacity expansion effort that included the installation of additional tools at its 200mm Mohawk Valley fab and the construction of a 445-acre silicon carbide materials facility in North Carolina, which will expand the firm’s existing materials capacity by more than 10x. The first phase of construction is due to be complete by the end of fiscal-year 2024.

See related items:

Wolfspeed raising $1.3bn in private offering

Wolfspeed to build largest SiC materials plant in Chatham County, North Carolina

Wolfspeed opens Mohawk Valley 200mm silicon carbide fab

Tags: Wolfspeed Power electronics

Visit: www.wolfspeed.com

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