STMicroelectronics will double its purchase of silicon carbide (SiC) wafers from Cree, based in Durham, North Carolina, over the next several years, the companies said in a statement on Tuesday.
The announcement is significant because of the increasing interest in using SiC diodes and MOSFETS (Metal Oxide Semiconductor Field-Effect Transistors), a market that some analysts predict will reach $3 billion by 2025. One forecast by Research N Reports said the market for SiC and GaN (Gallium Nitride) devices will grow by 50% through 2026, reaching $35.8 billion globally.
These diodes and MOSFETS are viewed as important for fast-growing automotive and industrial customers. ST recently said it will be the supplier of electronics for on-board chargers in Alliance electric vehicles.
In January, STMicroelectronics announced a multi-year deal with Cree for $250 million in its Wolfspeed SiC wafers.
That deal is now doubled to $500 million. STMicroelectronics claims it is the only semiconductor company with automotive grade SiC electronics in mass production.
ST will be buying 150 mm SiC bare and epitaxial wafers from Cree. However, ST has been building up SiC capacity through the supply chain and internally. In February, ST acquired a majority stake in Swedish SiC wafer manufacturer Norstel for $137 million, and then recently decided to exercise its option to buy the remaining 45% stake, which will close in the fourth quarter.
STMicroelectronics, based in Geneva, achieved $9.6 billion in revenues in 2018 with more than 100,000 customers worldwide. It produces a wide range of electronics and semiconductors.
SiC delivers better performance that is critical for electric vehicles and industrial products for solar, energy storage and UPS systems, Cree said. The auto industry is on a mission to find greater efficiencies for electric cars that need longer range and faster charging. For the industrial sector, SiC modules allow for smaller, lighter and cost-effective inverters that convert energy more efficiently.
SiC is widely considered faster, tougher and more efficient than straight silicon. It can withstand higher voltages and temperatures than silicon.
Cree recently announced a massive fab facility will be built in upstate New York.