SK Siltron Expands Its SiC Wafer Production with a $544 Million Loan from the U.S. Department of Energy

The U.S. Department of Energy (DOE) recently confirmed a $544 million loan to SK Siltron, a semiconductor wafer manufacturer under SK Group. This funding, which includes $481.5 million in principal and $62.5 million in interest, is intended to support the expansion of high-quality silicon carbide (SiC) wafer production for electric vehicles (EVs) as part of the Advanced Technology Vehicles Manufacturing (ATVM) initiative.

What Are the Details of the Agreement Between SK Siltron and the DOE?

SK Siltron has announced the finalization of an agreement with the DOE Loan Programs Office (LPO). The company plans to use both DOE and Michigan state funding to complete the expansion of its Bay City facility by 2027. This expansion will leverage the technological advancements from its Auburn Research Center to significantly increase the production of high-performance SiC wafers. Compared to traditional silicon wafers, SiC wafers offer substantial advantages, including a tenfold increase in operating voltage and a threefold increase in operating temperature. These characteristics make SiC wafers a critical material for power semiconductors used in electric vehicles, charging equipment, and renewable energy systems. Electric vehicles utilizing SiC power semiconductors can achieve a 7.5% increase in driving range, a 75% reduction in charging time, and over a 40% reduction in the size and weight of inverter modules.

The SK Siltron CSS plant located in Bay City, Michigan

How Is the Silicon Carbide Device Market Expected to Grow?

Market research firm Yole Development predicts that the SiC device market will grow from $2.7 billion in 2023 to $9.9 billion by 2029, with a compound annual growth rate of 24%. In 2023, SK Siltron CSS signed a long-term supply agreement with global semiconductor leader Infineon, leveraging its competitive edge in manufacturing, technology, and quality to expand its customer base and sales. As of 2023, SK Siltron CSS holds a 6% share in the global SiC wafer market and aims to become a global leader in the coming years.

What Are the Expectations for SK Siltron CSS Moving Forward?

Seungho Pi, CEO of SK Siltron CSS, stated, “The continued growth of the electric vehicle market will drive new models that rely on SiC wafers. This funding will not only facilitate our company’s growth but also help create jobs and stimulate economic development in Bay County and the Great Lakes Bay Region.”

What Is the Strategic Importance of SK Siltron CSS in the SiC Wafer Market?

Public records reveal that SK Siltron CSS is dedicated to the research, development, manufacturing, and supply of next-generation power semiconductor SiC wafers. SK Siltron acquired the company from DuPont in March 2020 and committed to investing $630 million between 2022 and 2027 to secure a competitive advantage in the SiC wafer market. SK Siltron CSS plans to begin mass production of 200mm SiC wafers by 2025. Both SK Siltron and SK Siltron CSS are subsidiaries of South Korea’s SK Group.