Wolfspeed Halts $3B SiC Factory Plan in Germany

On Wednesday, October 23, U.S. chip manufacturer Wolfspeed announced the suspension of its plans to build a semiconductor factory in Ensdorf, Germany, citing the slower-than-expected adoption of electric vehicles (EVs). In June, Wolfspeed had already delayed the construction of the $3 billion (approximately 21.35 billion RMB) factory and stated that it is still seeking funding, with the earliest possible start date now pushed to mid-2025.

The facility was intended to produce silicon carbide (SiC) chips for EVs, a sector driving much of the demand for these components. The decision highlights the challenges the European Union faces in boosting semiconductor production and reducing dependence on Asian chip suppliers. Beyond EVs, the SiC chips produced at the factory were also expected to serve industrial and energy applications.

Wolfspeed first announced its plans for the German facility, along with a research and development center, in February 2023. However, according to industry sources, German automotive company ZF, initially slated to invest $185 million in the project, is now considering withdrawing from the partnership.

This development follows Intel's recent decision to delay the construction of its own factory in eastern Germany by two years, as part of a broader cost-cutting effort. The postponement of Wolfspeed's factory plan marks another setback for Germany's ambitions to revitalize its industrial sector and strengthen its position in the global semiconductor market.