Cree recently announced expansion of its NC silicon manufacturing facility and establishment of the world’s largest silicon carbide manufacturing plant in NY to create a silicon carbide corridor on the East Coast of the United States – what market projections and dynamics are driving such a bold expansion of capacity?

Recent estimates from Canaccord Genuity are calling for the demand of silicon carbide to grow more than $20 billion by 2030, mainly driven by a major expansion in electric vehicles and related charging needs. These vehicles, along with a host of other wireless broadband dependent devices, will be connected to ultra-fast 5G networks that will be capable of transferring massive amounts of data and supporting a level of interconnectivity that has previously been impossible.  At the core, helping to power these solutions will be silicon carbide and GaN technologies that Cree has pioneered over the last 30 years and that we continue to refine each and every day.  As the pioneering leader in silicon carbide and GaN technologies, Cree has one of the most advanced portfolios within the industry, and our robust pipeline of opportunities reinforces our confidence in the long-term market opportunity.  In fact, we have announced a number of key partnerships that underscore the growth opportunities across the business, including work with Delphi Technologies, ZF, STMicroelectronics and ABB.

To further illustrate the demand, global automotive manufacturers have announced more than $300 billion in EV investments, including Ford’s $11B announcement to introduce 40 EVs by 2023 and Volkswagen’s $25B Investment to build EV versions of all 300 vehicles by 2030.

What are the primary markets/applications that these products address?

Cree's silicon carbide devices are primarily targeted for applications in electric vehicles, fast charging infrastructure, inverters and power supplies, telecom, military and aerospace.

GaN on silicon carbide has become the product of choice for many high-power RF applications where efficiency is a key metric – will these devices be able to meet the cost and thermal requirements that the market demands?

Silicon Carbide has three times the thermal conductivity of Silicon.This allows GaN devices on SiC substrates to run at significantly higher power density levels than GaN devices on silicon. If RF devices put out high watts per square centimeter, a high amount of heat per square centimeter has to be dissipated, which is a key advantage of silicon carbide. Silicon carbide substrates also remain semi-insulating at high operating temperatures, which minimizes losses into the substrate as opposed to silicon substrates. As the market leader in silicon carbide today, Cree produces roughly 60% of the material in the world. Due to that size and scale, we have a substantial advantage over competitors when it comes to pricing, which continues to decrease with advancements in the manufacturing process. As that pricing continues to drop, the value proposition increases and you will see silicon carbide adoption continue to accelerate.

While 5G infrastructure and A&D seem like a good match for RF GaN, what other markets do you see this technology addressing (do you ever see RF GaN in a mobile device)?

Cree addresses a number of other markets, including RF heating and weather radar. Given the current architectures, we don’t see a near term use for GaN in mobile devices.

Power switching is projected to be an even larger market for GaN on silicon carbide than RF, what are the primary drivers there?

For wide bandgap power devices, GaN can serve the market in select segments; however, Cree concentrates on voltages at 600V and higher, where silicon carbide power devices offer a clear advantage and value to applications. Current commercial activities in this space also support this view.

The penetration of GaN in power switching seems to be slow, what is holding it back from wide-spread adoption given it performance advantages?

Cree is not focused on GaN for power switching. However, the adoption of SiC power devices is much further along, and has been growing rapidly. This is where we have been focused.

What are the primary markets being addressed with silicon carbide devices?

Silicon carbide is substantially better than silicon in power electronics. It has ½ to 1/10th the switching losses of silicon depending on the voltage and frequency of operation being used and offers three times the power density, so silicon carbide enables high-voltage power electronics to be lighter, smaller, more efficient and less expensive at the system level. This superior performance is powering new sectors and reviving established ones. We’re seeing applications for silicon carbide across a number of different end-equipments. Cree is primarily focused on the automotive, RF, industrial and energy infrastructure markets, with the automotive industry’ transition to EVs being front and center. Automotive applications are for the inverter, on-board and off-board charging and charging infrastructure. In RF, silicon carbide with GaN is ideal for base stations as the rollout of 5G accelerates. We’re also seeing a growing interest for silicon carbide in industrial applications. As we expand our position and drive the cost down, it enables more end-equipment segments to take advantage of silicon carbide’s superior performance.

There seems to be a shortage of electronic engineers and technicians in the industry, how will Cree staff up these facilities fast enough to meet the projected demand?

Cree is partnering with local community and four-year colleges in North Carolina and New York to develop training and internship programs to prepare our workforce for the high-tech employment and long-term growth opportunities that our expansion plan presents. We also realize the importance of engaging with students before they enter college. As such, we are working with local schools to inspire younger students to get involved in STEM careers. For example, Cree employees currently serve as mentors for local STEM students in N.C. and we recently made a $25,000 donation to the SUNY Polytechnic Institute Foundation and their FIRST Program, which is dedicated to expanding STEM opportunities to students in the Mohawk Valley region of New York.

How is Cree addressing the market in China and what is your outlook there?

We remain confident about the future that lies ahead but recognize the path to success is not a straight line, and there are market challenges that we must navigate. Cree is laser-focused on continuing to build on our recent momentum and remaining the global leader of silicon carbide. Despite near-term headwinds, we are winning in the market and positioned well for long-term growth.

It seems like Cree is betting big on silicon carbide technology, what are the primary risks in this large expansion from competing technologies or market projections?

Historically, the demand for silicon carbide has long surpassed the available supply, but Cree’s capacity announcement has addressed major concerns around this and changed the game. The expansion enables us to increase silicon carbide wafer fabrication and materials production by more than 30 times each. Given the current market demand and rapid adoption from industries such as automotive and communications infrastructure, it is clear that the global transition from silicon to silicon carbide is in full swing. However, silicon carbide is not easily replicated or created. As the pioneering leader in silicon carbide and GaN technologies, Cree has one of the most advanced portfolios within the industry.  No other company can match our 30 years of experience with silicon carbide and creating or managing development cycles. Based on those factors, we have the right strategy, the right technology and the longstanding expertise that positions Cree to be the leader in accelerating the industry’s global transition from silicon to silicon carbide and addressing serviceable markets.  The entire team at Cree is excited about the future and confident that we have differentiated technologies that are critical to our customers’ success.