BorgWarner invests $500 million in Wolfspeed
Wolfspeed and BorgWarner are entering into a strategic partnership under which BorgWarner will invest USD 500 million in Wolfspeed's financing transaction in exchange for a SiC device capacity corridor.
Under this new multi-year agreement between the two companies, BorgWarner will be entitled to purchase up to USD 650 million of devices annually as its requirements increase.
"Silicon carbide-based power electronics play an increasingly important role for our customers as our electric vehicle business continues to accelerate," says Frédéric Lissalde, President and CEO of BorgWarner, in a press release. "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."
BorgWarner's is targeting USD 4.5 billion of electric vehicle revenue for 2025 with its "Charging Forward" strategy, compared to less than USD 350 million during 2021.
"Today's 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," said Gregg Lowe, President and CEO for Wolfspeed.
The CEO continued to state that this agreement – combined with Wolfspeed's recent announcement of a multi-billion-dollar materials expansion in North Carolina – confirms that the industry transition from silicon to silicon carbide is underway.
Last month, during Wolfspeed's Investor Day, the company outlined a multi-year, USD 6.5 billion capacity expansion, which included the installation of additional tools at the company's 200mm Mohawk Valley fab and the construction of a 445-acre Silicon Carbide materials facility in North Carolina – which will result in an 10x expansion of the company's existing materials capacity. The company currently expects the first phase of construction to be complete by the end of FY2024.