Cree’s fab expansion is now going vertical
Despite the current pandemic, things are moving along for the semiconductor manufacturer’s expansion in Mohawk Valley, New York. The steal girders are standing tall and walls are going up.
In May 2019, the company started a significant, multi-year factory optimisation plan to be anchored by an automated 200 mm silicon carbide fabrication facility. And in September 2019, Cree announced that it had decided on a location and that it intended to build its new fabrication facility in Marcy, New York – to complement the factory expansion underway at its US campus headquarters in Durham, North Carolina. Now a full year since the site location was announced, progress is being made. In an update on LinkedIn, the company is showing the current state of its massive expansion in Mohawk Valley in Marcy, New York. With this project, Cree is setting out to build the industry’s biggest silicon carbide (SiC) wafer facility – globally. And as the update states, progress is on schedule, which means that so is the creation of 600+ new jobs. Once completed, this brand new power and RF wafer fabrication facility will be automotive-qualified and 200mm-capable. It will also be complemented by the company’s massive materials factory expansion currently underway at its Durham, North Carolina headquarters. During the company’s fourth quarter earnings call, CEO Gregg Lowe, touched on the current expansion projects: “A lot of great activity going on up in Mohawk Valley, the fab is now going ‘vertical’. So there are steel girders that have been installed and walls are being installed and so forth. We're really excited about that. There's been excellent work at the prototype line in Albany with some really good progress on that. The materials expansion that is part of our overall capacity expansion is going well, yields and costs and so forth are improving as well.” He was joined by CFO, Neill Reynolds, who said; “I think to-date we've made excellent progress. We poured concrete. As Gregg mentioned the vertical construction is underway. We expect that fab to begin ramping sometime in the 2022 calendar timeframe. And I think what that does is it supports the Wolfspeed growth in '22 and beyond.” He continued saying that “we're going to see some big moving pieces here over the next four to six quarters as we start to make what we think is going to be significant progress there.” At the same time, the CFO, reminded everyone that this is not the only expansion currently going on at Cree; “I don't want you to overlook this is that we also have an expansion going on down in Durham right now and that's a fab expansion.” He stated that the company is outsourcing the LED silicon carbide and fab operations and “kind of upgrading that replacing it with Wolfspeed capacity.” This will, according to Reynolds, support the capacity ramp at the end of this year. In an interview with the Albany Business Review, following a site visit, Gregg Lowe said that the construction is preparing for the placement of the final steel beam of the main fab building in the coming months. Work will continue for the administrative building, and in some parts of the main fab, interior work has already begun. The company will be able to start moving tools into the cleanroom by next summer, and as the CEO told the Business Review; “We're on schedule and we will be going into production in 2022.” According to Lowe, the factory is a USD 1 billion bet that the electric vehicle market will take off over the next decade, and many of the company’s customers will be ramping up production right as Cree’s factory goes online. The total project cost for this massive expansion is, as stated earlier, estimated to be more than USD 1 billion. And as pointed out by the Business Review (citing Empire State Development board documents), this includes USD 183 million for design and construction, USD 300 million for facility fit out, and USD 522 million worth of equipment, including some of which Cree already owns. However, the state plans to reimburse Cree with a USD 500 million grant. This would then cover about half the cost of the project, dependent on Cree meeting certain goals.
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