Wolfspeed, a leading supplier of Silicon Carbide technology and BorgWarner have inked a strategic partnership that will see BorgWarner to invest $500 million (Rs 4,056 crore) in Wolfspeed’s financing transaction, which was announced earlier by Wolfspeed, in exchange for a silicon carbide device capacity corridor.
Under the multi-year agreement between BorgWarner and Wolfspeed, BorgWarner will be entitled to purchase up to $650 million (Rs 5,272 crore) of devices annually as BorgWarner requirements increase.
Frederic Lissalde, President and CEO, BorgWarner said, “Silicon carbide-based power electronics play an increasingly important role for our customers as our electric vehicle business continues to accelerate. We believe 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 added.
Under its Charging Forward strategy BorgWarner is targeting $4.5 billion (Rs 36,504 crore) of electric vehicle revenue for 2025, compared to less than $350 million (Rs2,839 crore) in 2021. Based on new business awards and acquisitions announced as of the its third quarter earnings release, BorgWarner believes it is already on track to achieve approximately $4 billion (Rs 32,448 crore) of electric vehicle revenue by 2025.
Gregg Lowe, President and CEO, Wolfspeed said, “The announcement demonstrates the creative solutions two collaborative and strategic partners are pursuing to better support the growing demand for silicon carbide devices. 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.”
“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,” Lowe added.
Last month at the company’s Investor Day, Wolfspeed outlined a multi-year, $6.5 billion (Rs 52,728 crore) capacity expansion effort which included the installation of additional tools at the company’s state-of-the-art, 200mm Mohawk Valley fab and the construction of a 445-acre Silicon Carbide materials facility in North Carolina, which will expand the company’s existing materials capacity by more than 10x. The first phase of construction is slated to be complete by the end of FY2024.