EV demand slows, Wolfspeed (WOLF.US) abandons German chip plant plan
1min read Wolfspeed has abandoned plans to build a semiconductor factory in Ensdorf, Germany, due to a slowdown in demand for electric vehicles, according to reports from outside the country, the latest blow to German Chancellor Olaf Scholz's ambitions to make Germany a semiconductor powerhouse.
The North Carolina-based company had previously delayed a $3bn investment in a chip factory to develop computer chips for electric vehicles, it said in June.
Wolfspeed focuses on silicon carbide and gallium nitride technologies. The EU has been trying to boost semiconductor production and reduce its reliance on Asian chips, and the company's move highlights the difficulties facing that plan.
Wolfspeed announced plans to build a 200mm semiconductor factory in the German state of Saarland in February last year. However, according to a previous report, the company reduced its capital expenditure after a softening in the EU and US electric vehicle markets and is now focusing on expanding its production in New York.
Industry sources cited by the media said German car parts supplier ZF had planned to pull out of a microchip manufacturing project with Wolfspeed. ZF denied reports that the factory was delayed.
Intel had also delayed a €30bn investment in a factory in Magdeburg, Germany, which would have received €9.9bn in government aid.
Germany has been at the forefront of supporting Intel, TSMC, Infineon and Wolfspeed, but those plans have yet to be approved by the EU.
Meanwhile, companies including TSMC, STMicroelectronics, Infineon and GlobalFoundries have announced plans to build new factories in Europe, which are based on the EU's Chips Act, which aims to support domestic chip manufacturing with a proposed investment of €43bn.
Several countries, including the US, China, Japan and South Korea, have also stepped up domestic chip production as they seek to stay ahead in the race for artificial intelligence. Several companies have signed preliminary agreements with the US Commerce Department to receive funding under the Chips Act.
