11 October 2023
Materials, networking and laser technology firm Coherent Corp of Saxonburg, PA, USA says that automotive supplier DENSO Corp of Kariya, Aichi prefecture, Japan and Tokyo-based Mitsubishi Electric Corp have agreed to invest an aggregate $1bn in its silicon carbide business. The transaction results from Coherent’s strategic review process announced in May for the business.
DENSO and Mitsubishi Electric will each invest $500m in exchange for a 12.5% non-controlling ownership stake, with Coherent owning the remaining 75%. Prior to completion of the transaction, Coherent will separate and contribute the business to a subsidiary. Coherent will control and operate the business, which will continue to be led by Sohail Khan, Coherent’s executive VP, New Ventures & Wide-Bandgap Electronics Technologies.
In connection with the transaction — which is expected to close in first-quarter 2024 — the business will enter into long-term supply arrangements with DENSO and Mitsubishi Electric that support their demand for 150mm and 200mm silicon carbide (SiC) substrates and epitaxial wafers.
“After a thorough review of strategic alternatives for our silicon carbide business, we determined that the creation of a separate subsidiary and the strategic investments from DENSO and Mitsubishi Electric, two leaders in SiC power devices and modules, is the best path forward to maximize shareholder value and position the business for long-term growth,” says Coherent’s chair & CEO Dr Vincent D. Mattera Jr. “The investments from our strategic partners will be used to accelerate our capacity expansion plans and help sustain our leadership position, while ensuring 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,” he adds.
“Through this investment, we will secure a stable procurement of SiC wafers, which are critical for BEVs, and contribute to the realization of a carbon-neutral society by promoting the widespread adoption of BEVs,” says Shinnosuke Hayashi, president & chief operating officer, representative member of the board at DENSO.
“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 decarbonized world,” says Dr Masayoshi Takemi, executive officer, group president, Semiconductor & Device, at Mitsubishi Electric. “To capitalize on this trend, we have decided to expand our SiC power semiconductor production capacity, including by constructing a 200mm wafer plant in the Shisui area of Kumamoto Prefecture,” he adds. “We are delighted to strengthen our partnership with Coherent by investing in this new SiC company, which will provide us with a stable supply of high-quality SiC substrates essential for our increased supply capacity.”