Construction of the Wolfspeed and ZF semiconductor factory is on hold

On Tuesday it was reported that the billion-euro project was on the brink of cancellation, partly because ZF allegedly wanted to withdraw from the project, according to the German Handelsblatt newspaper. This has still not been officially confirmed. But there is a lot of sand in the project’s gears: The Minister-President of Saarland, Anke Rehlinger (SPD), announced that the construction of the semiconductor factory will be delayed indefinitely. “This does not mean that the project has been shelved, but it has been pushed back further on the timeline to an unspecified date, especially depending on the developing market situation,” Rehlinger said. However, the main investor Wolfspeed remains committed to the Ensdorf site, said Rehlinger.

The “uncertainties that have now arisen around the investment at Wolfspeed” are “a setback for Saarland” and also “a setback for structural change in Saarland,” the head of the state added. This reflects the difficult market situation for e-mobility in Germany and Europe. This is because the silicon carbide semiconductors produced in Ensdorf are primarily intended for use in electric cars – hence the connection between the ramp-up of electromobility and the demand for semiconductors.

Wolfspeed and automotive supplier ZF presented their plans for the factory in Saarland in February 2023. At the time, they said they wanted to start construction as soon as possible. However, in the summer of 2024, Wolfspeed announced that construction would not begin until 2025 after all. According to tagesschau.de, Wolfspeed wanted to invest around 2.7 billion euros and ZF the much smaller amount of 170 million euros. In addition, around half a billion euros in state funding was to be provided by the federal government and Saarland. 600 jobs were to be created.

ZF has since commented on the matter in an interview with the publication Wirtschaftswoche. The company refutes the claim that ZF is responsible for delaying Wolfspeed’s plans to build a chip factory in Ensdorf. Wolfspeed is responsible for the project. “ZF has always provided intensive and active support here. We do not comment on the exact content of the partnership or on funding instruments,” ZF specified.

The news agency Reuters reported that Wolfspeed had put the plan for the plant on hold indefinitely due to weak demand for electric cars. “They don’t know whether it still makes sense to enter the European market,” Reuters quoted an insider as saying. Wolfspeed has still not commented on the matter.

barrons.com, manager-magazin.de, tagesschau.de (both in German)