Cree announced that it would supply $250 million worth of silicon carbide wafers to STMicroelectronics. The deal underscores the growth in the market for chips based on silicon carbide, gallium nitride and other wide bandgap semiconductors in electric cars, factory equipment and other applications that have to handle high temperatures and high voltages.
The company has another $100 million silicon carbide manufacturing deal with Infineon Technologies. Last year, Infineon canceled its $850 million deal to buy Cree’s wide bandgap semiconductor unit, Wolfspeed, after regulators refused to approved it. Power semiconductors based on silicon carbide are increasingly used in solar energy converters, electric vehicle charging systems and industrial power supplies.
“STMicroelectronics is the only semiconductor company with automotive-grade silicon carbide in mass production today, and we want to press forward to grow our silicon carbide business both in terms of volume and breadth of applications served,” the company’s chief executive officer, Jean-Marc Chery, said in a statement. The market for chips based on silicon carbide is projected to grow to $3 billion in 2025, he added.