Shares of Wolfspeed (NYSE:WOLF) surged 17.8% in pre-open trading Wednesday after announcing a 10-year silicon carbide wafer deal with Japanese semiconductor company Renesas (TYO:6723). The deal comes with a $2 billion deposit from Renesas to Wolfspeed.
The collaboration enables Renesas to expand the production of silicon carbide power semiconductors, starting in 2025.
Meanwhile, the $2 billion deposit to Wolfspeed secures the supply agreement for both 150mm and 200mm silicon carbide wafers and supports Wolfspeed’s U.S. capacity expansion plans at its JP facility in Chatham County, North Carolina. This state-of-the-art, multi-billion-dollar factory aims to achieve over a tenfold increase in Wolfspeed's current silicon carbide production capacity at its Durham campus.
“The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This empowers Renesas to scale our power semiconductor offerings to better serve customers’ vast array of applications,” said Hidetoshi Shibata, president and CEO of Renesas. “We are now poised to elevate ourselves as a key player in the accelerating silicon carbide market.”
“With the steepening demand for silicon carbide across the automotive, industrial and energy sectors, it’s critically important we have best-in-class power semiconductor customers like Renesas to help lead the global transition from silicon to silicon carbide,” said Gregg Lowe, president and CEO of Wolfspeed. “For more than 35 years, Wolfspeed has focused on producing silicon carbide wafers and high-quality power devices, and this relationship marks an important step in our mission to save the world energy.”