Structural change: Will the Saarland get a large semiconductor factory?

Silicon carbide semiconductors are seen as a game changer in electromobility.

Structural change: Will the Saarland get a large semiconductor factory?

Silicon carbide semiconductors are seen as a game changer in electromobility. With these powerful chips, electric cars could become more attractive: They promise faster charging, more economical consumption and thus a longer range.

According to the latest media reports, the US chip manufacturer Wolfspeed now wants to build what is said to be the world's largest factory for silicon carbide semiconductors on the site of a former coal-fired power plant in Ensdorf in Saarland. There is no official confirmation of this yet.

This Wednesday there could be clarity. According to the Federal Chancellery, Chancellor Olaf Scholz (SPD) and Federal Economics Minister Robert Habeck (Greens) are taking part in Ensdorf "in an event on an industrial policy project in the field of microelectronics" (3.30 p.m.). Further details were not initially available.

Wolfspeed wants funding

The car supplier ZF also has a minority stake in the factory, the “Handelsblatt” reported. According to information from the "Saarbrücker Zeitung" and the Saarländisches Rundfunk, up to 1000 jobs will be created. Series production of the chips, which are primarily used in electric vehicles, should begin in a few years. The Saarland state government and ZF did not want to comment on the reports.

According to media reports, a joint research center is also planned, in which ZF holds the majority. The automotive supplier ZF has around 9,000 employees at its Saarbrücken location. In November 2022, ZF announced that its Saarbrücken plant would become the lead location for electric drive systems. Investments in the three-digit million range are planned in order to develop drive technology for purely electric vehicles in the future, said ZF board member Stephan von Schuckmann.

According to the "Handelsblatt", however, there has not yet been any commitment for state subsidies for the Wolfspeed project. The subsidies are the prerequisite for the commitment in Saarland. Semiconductor manufacturers usually calculate with public funds of 40 percent of the total costs.

Chips are required in many industries

The US company Wolfspeed was founded in 1987 under the name Cree in Durham, North Carolina. According to Wolfspeed, it is the market leader in the application of semiconductors based on the particularly conductive materials silicon carbide and gallium nitride. These chips are required, among other things, for electric cars, fast chargers, 5G mobile communications technology, energy storage and projects in the aerospace and defense industries.

For fiscal year 2022, the company reported sales of $746 million (€689 million). By 2027, sales should increase to USD 4 billion (3.7 billion euros). A presentation to investors in October 2022 said the planned new plant at the yet-to-be-declared location will be the largest Wolfspeed factory.

Of the company's total investment of $6.5 billion, this new facility alone would account for more than $2 billion. More than half of the total sales would then be made in the new plant. Construction is scheduled to begin in 2023 and production will start in 2027.