Wolfspeed (WOLF) Stock Surges Following Silicon Carbide Wafer Deal with Renesas Electronics

Shares of Wolfspeed, Inc. (NYSE: WOLF) are surging by 5.04% in pre-market trading today. The surge comes after the company signed a 10-year agreement with Renesas Electronics Corporation for the supply of silicon carbide wafers.

Renesas Electronics Corporation and Wolfspeed (WOLF) have announced a significant wafer supply agreement, accompanied by a substantial $2 billion deposit from Renesas. This deposit secures a decade-long commitment from Wolfspeed to supply Renesas with high-quality silicon carbide bare and epitaxial wafers. The agreement marks a crucial step for Renesas in scaling up the production of silicon carbide power semiconductors, with plans to commence in 2025.

The agreement involves Wolfspeed providing Renesas with 150mm silicon carbide bare and epitaxial wafers, with plans to scale up the supply in 2025. This move aligns with the companies’ vision to lead an industry-wide transition from traditional silicon to more efficient silicon carbide semiconductor power devices. In addition, the agreement includes plans to provide Renesas with 200mm silicon carbide bare and epitaxial wafers once the John Palmour Manufacturing Center for Silicon Carbide becomes fully operational.

The demand for more efficient power semiconductors is on the rise, particularly in automotive and industrial applications. This demand is driven by the growth of electric vehicles (EVs) and renewable energy. Renesas is taking swift action to meet this demand by expanding its in-house manufacturing capacity. The company has already announced the revival of its Kofu Factory for IGBT production and the establishment of a silicon carbide production line at its Takasaki Factory.

Silicon carbide power devices offer several advantages over conventional silicon semiconductors, such as higher energy efficiency, greater power density, and lower overall system costs. This makes them a preferred choice for various high-volume applications like EVs, renewable energy, charging infrastructure, industrial power supplies, and more.

The $2 billion deposit from Renesas will provide critical support to Wolfspeed’s ongoing capacity construction projects, including the development of the John Palmour Manufacturing Center. This state-of-the-art facility, located in Chatham County, North Carolina, is set to become the world’s largest silicon carbide materials factory. The multi-billion-dollar facility aims to increase Wolfspeed’s silicon carbide production capacity by over tenfold compared to its current operations in Durham, North Carolina. The JP facility will mainly produce 200mm silicon carbide wafers, larger than the 150mm wafers, resulting in more chips per wafer and ultimately reducing device costs.

About The Author