Coherent scores major investment in new SiC unit from Denza, Mitsubishi Electric

The Japanese corporations will put in $500 million each in exchange for a 12.5% non-controlling ownership interest in Coherent’s new business unit. The new Coherent subsidiary is called Silicon Carbide LLC.

The deal also entails long-term supply agreements to support Denso’s and Mitsubishi’s 150 mm and 200 mm substrate and epitaxial wafer demand.

The agreement also aligns with Coherent’s plans to invest $1 billion over the next ten years to expand its production of silicon carbide wafers, which help boost the range of electric vehicles more than chips made with traditional silicon.

A brief tech interlude – SiC semiconductor efficiency lies in their higher conductivity and switching frequencies than pure silicon (SI) chips. Only around half as much energy is lost as heat, which increases the range of electric cars. The power electronics cooling system can be smaller since less heat is emitted, and the SiC components can withstand higher temperatures. The more compact cooling systems save energy and reduce weight and costs. SiC wafers then comprise a thin slice of semiconductor material constructed of various substances.

Here, Coherent notes it had “aggressively invested” to scale its 150 mm and 200 mm substrates manufacturing to address this “underserved market”.

This is also a point of interest for the new Japanese shareholders, which attest to the company’s “excellent track record in SiC wafer quality and mass production capabilities”. Denso adds that the new deal would secure “a stable procurement” of said SiC wafers while further strengthening the competitiveness of its inverters, which drive and control motors of electric vehicles.

“We are very pleased to establish a strategic relationship with Coherent. Through this investment, we will ensure stable procurement of SiC wafers, which are critical for BEVs,” said Shinnosuke Hayashi, President and COO at Denso.

Mitsubishi Electric has been procuring 150 mm SiC substrates from Coherent to produce SiC power modules for many years. In today’s news, the company announced that in addition to developing 200mm SiC substrates with Coherent, Mitsubishi Electric plans to invest approximately 100 billion yen to construct a new SiC wafer plant in Kumamoto Prefecture, Japan, beginning in 2026.

The company has supplied SiC power modules for high-speed trains, high-voltage industrial applications, and home appliances for many years. It claims launching the world’s first SiC power modules for air conditioners in 2010 and that it became the first supplier of a full SiC power module for Shinkansen “bullet trains” in 2015.

With Coherent, Mitsubishi Electric also aims to stabilise its procurement of SiC substrates for SiC power modules.

“Demand for SiC power semiconductors is expected to grow exponentially as the global market for electric vehicles increases in line with the transition to a decarbonised world,” Mitsubishi Electric’s Masayoshi Takemi commented.

“We are excited to expand our strategic relationships with Denso and Mitsubishi Electric to capitalise on the significant demand for silicon carbide,” added Vincent Mattera, Jr., CEO of Coherent. He expects the investments to help the company ensure “the development of a robust and scalable supply for the rapidly growing market for SiC-based power electronics, largely driven by the explosive growth of the global electric vehicle market.”

reuters.com, coherent.com, denso.com, mitsubishielectric.com