Durham-based Wolfspeed is partnering with a German company to build a semiconductor factory in the southwest German state of Saarland.
German Chancellor Olaf Scholz joined Wolfspeed CEO Gregg Lowe and other officials for the announcement Wednesday.
The factory, which will make silicon carbide wafers, will be constructed on the site of a former coal power plant in the town of Ensdorf, near Germany’s border with France and Luxembourg.
“Here on this site of a former coal burning power plant, and a reminder of our industrial past," Lowe said. "We want to build a bridge; a bridge to a better and cleaner industrial future."
Wolfspeed says the plant is part of a $6.5 billion investment in increasing manufacturing capacity that includes a silicon carbide factory in Siler City, which the company announced last year. The facilities are designed to meet a growing demand for computer chips in electric vehicles, wind turbines, and other renewable energy technologies.
“Because with semiconductors made of silicon carbide, electric cars can go further and charge faster, helping to accelerate the transition from gasoline automobiles to fully electric vehicles,” Lowe said. “Solar farms can be more efficient, and direct more clean energy to the grid, allowing us to reduce our dependency on fossil fuels.”
The announcement comes amid a dispute between the Biden Administration and the European Union over subsidies for clean energy technology. The Inflation Reduction Act — which Biden signed into law last year — includes billions in subsidies for chipmakers and electric vehicle manufacturers.
Scholz, the German Chancellor, said he welcomed the investment by a U.S. company, but added: "At the same time, we're also talking with our American friends for European companies to not be at a disadvantage. Because it's not customs barriers and strict rules of origins, which paved the way for open for innovation, but open markets and fair competition."
Scholz also mentioned the E.U. is working on its own subsidy package for European firms.
Construction on the Saarland plant is expected to begin later this year. Wolfspeed is partnering with German auto parts maker ZF Group on the project. Wolfspeed has also promised to open an innovation center at another site in Germany.
