BorgWarner to invest $500M in Wolfspeed
Agreement ensures BorgWarner has a reliable supply of SiC devices for its inverter growth plans
SiC specialist Wolfspeed and e-mobility firm BorgWarner have announced a strategic partnership that calls for BorgWarner to invest $500 million in Wolfspeed’s financing transaction in exchange for SiC device capacity.
Under the multi-year agreement between BorgWarner and Wolfspeed, BorgWarner will be entitled to purchase up to $650 million of devices annually as BorgWarner requirements increase.
“SiC-based power electronics play an increasingly important role for our customers as our electric vehicle business continues to accelerate,” said Frédéric Lissalde, president and CEO of BorgWarner.
“We believe this agreement helps ensure that BorgWarner will have a reliable supply of high-quality SiC devices, which are significant to the company’s inverter growth plans.”
BorgWarner’s Charging Forward strategy targets $4.5 billion of electric vehicle revenue for 2025, compared to less than $350 million in 2021. Based on new business awards and acquisitions announced as of the Company’s third quarter earnings release, BorgWarner believes it is already on track to achieve approximately $4 billion of electric vehicle revenue by 2025.
“Today’s announcement demonstrates the creative solutions two collaborative and strategic partners are pursuing to better support the growing demand for SiC 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.
“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 SiC is well underway.”
Last month at the company’s Investor Day, Wolfspeed outlined a multi-year, $6.5 billion 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 SiC 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.