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Chip manufacturer Wolfspeed to build USD 3 billion factory in Saarland

US semiconductor manufacturer Wolfspeed has announced plans to build the world’s largest silicon carbide semiconductor factory in Ensdorf, Saarland.

The North American chip company will build a USD 3 billion chip production and R&D facility on the former site of a coal-fired power plant. Wolfspeed plans to invest up to three billion euros in a state-of-the-art chip factory at the Ensdorf site, with project partner automotive supplier ZF investing USD 185 million in the landmark deal.

Largest and most modern chip factory of its type in the world

According to Wolfspeed, the planned 200mm semiconductor fab will be the largest and most modern silicon carbide semiconductor factory of its kind in the world. Silicon carbide semiconductors, which can be used to increase electric vehicle range, will be manufactured at the Ensdorf facility. Construction at the Ensdorf site is expected to begin in the coming months subject to subsidy approval from the European Union. The fully operational factory will house a workforce of more than 600 people, generating further jobs in the immediate environs to create around 1,000 new jobs in total.

R&D Center part of European Union IPCEI project

The joint R&D center, in which ZF will turn have a majority stake, is part of a collaboration within the Important Project of Common European Interest (IPCEI) for microelectronics and communication technologies of the European Commission. Project funding will be made available to support technology development and initial project deployment. 

Germany an attractive semiconductor production location

Federal Chancellor Olaf Scholz, Federal Minister for Economic Affairs and Climate Action Robert Habeck and Saarland Minister-President Anke Rehlinger were all in attendance as the official announcement was made on February 1 at the proposed site. According to Federal Minister Habeck, Wolfspeed’s decision to locate to Saarland is a sign of the attractiveness of Germany as an investment location.

The fact that semiconductor production is being located in Germany is "an important signal that Germany continues to be an attractive location in a difficult situation, including for high technology." Federal Chancellor Scholz echoed these sentiments, noting that “with the construction of this factory, the industrial revolution is returning to Ensdorf. There is much to suggest that the future belongs to silicon carbide semiconductors in the field of new renewable energies, telecommunications and especially in electromobility.”

The Wolfspeed deal comes hot on the heels of a number of recent single and double-digit billion euro investments in Germany’s semiconductor and electric vehicle battery sectors. In March 2022, Intel announced plans for the construction of a EUR 17 billion gigafactory in Magdeburg - the single biggest foreign direct investment by a company in Germany and Europe in history.

Silicon carbide chips key technology in electric mobility revolution

Semiconductors made of silicon carbide are widely considered as being a key technology in the transition to electric mobility thanks to their fast charging and increased efficiency qualities. Wolfspeed president and CEO Gregg Lowe observed that the new production facility at the 14 hectare site represents a big step forward for the company and its regional clients. “This new facility will be crucial to supporting our expansion in a capacity constrained industry that is growing very rapidly, especially across the EV marketplace.  It was important for us to have a facility located in the heart of Europe, near many of our customers and partners, to foster collaboration on the next generation of Silicon Carbide technologies.”

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