Written by Collins Eshiet | Edited by Cláudio Afonso
The U.S. chipmaker Wolfspeed has suspended its plan to build a microchip factory in Germany on slower than expected demand for electric vehicles.
The plan was initially unveiled in February 2023 with the company announcing that the German car parts supplier ZF intended to make “a significant investment in Wolfspeed to support the project’s construction”.
Last week, the Biden-Harris administration unveiled plans to allocate up to $750 million in direct funding to Wolfspeed, supporting the company’s new silicon carbide facilities in North Carolina and New York.
The use of silicon carbide allows for greater efficiency in the computer chips used in electric vehicles and other advanced technologies.
A spokesperson from Wolfspeed stated, “With our improved productivity, coupled with the currently forecasted slower ramp of the EV marketplace, we believe we have the capacity we need for the foreseeable future.”
“Wolfspeed is responsible for the project. ZF has always provided intensive and active support here,” a spokesperson told ZF Reuters earlier this week amid a report that involved the German car parts supplier in the plant project.
Experts on the matter say that the suspension of this project is in view of the national economic outlook for Germany by the International Monetary Fund earlier this week.
According to the organization, the German economy will flatline this year and peak at 0.8% in 2025, this dwindling economy might also affect the demand for EV chips within the region.
US chip manufacturing company, Intel, have also begun delaying work on two of its plants in Magdeburg, Germany. The reason behind Intel’s move was to cut costs as the global semiconductor industry faces challenges in its growth.
Written by Collins Eshiet | Edited by Cláudio Afonso
