Denso Puts $500M Into Silicon Carbide Wafer Firm

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Denso Corporation has declared a minority stake investment of US $500 million in Coherent Corp’s Silicon Carbide (SiC) division. Similarly, Mitsubishi Electric contributed $500 million to acquire a 12.5% non-controlling share in the SiC business.

Coherent initiated its Silicon Carbide business in April 2023, focusing on producing SiC wafers. Denso Corporation’s investment aims to guarantee a consistent, long-term supply of SiC wafers, enhancing the competitiveness of its electrification parts. With this financial involvement, Denso will have a 12.5% ownership in Silicon Carbide.

As the push towards vehicle electrification to cut down CO2 emissions intensifies globally, there’s a concurrent surge in semiconductor demand. Silicon Carbide (SiC) emerges as a pivotal material for devices because it outperforms traditional silicon in challenging conditions like high temperatures, frequencies, and voltages. This superior performance aids in power loss reduction and the miniaturization and lightening of Battery Electric Vehicle (BEV) systems.

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Investing in Silicon Carbide gives Denso access to high-quality 150mm and 200mm SiC wafers, renowned for their mass production capabilities and quality. This move will notably boost the efficiency of Denso’s inverters responsible for operating and regulating electric vehicle motors.

Shinnosuke Hayashi, Denso’s President, COO, and Representative Member of the Board, expressed his enthusiasm about the strategic alliance with Coherent, praising their exemplary SiC wafer production. He emphasized that this partnership would bolster the supply of SiC wafers crucial for BEVs, supporting the broader goal of achieving a carbon-neutral society by advancing BEV adoption.

Dr. Vincent D. Mattera, Jr., the Chair and CEO of Coherent, welcomed the opportunity to strengthen ties with Denso. He highlighted the role of investments in accelerating Coherent’s capacity expansion strategies, maintaining its leading position, and fostering a resilient, scalable supply to cater to the booming demand for SiC-centric power electronics. The exponential growth of the global electric vehicle sector primarily fuels this demand.

Projections suggest that the potential market for SiC will leap from $3 billion in 2022 to a staggering $21 billion by 2030, with an impressive 28% compound annual growth rate.

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