New tech prompts $1 billion investment by N.C. company

Author

When it comes to plant investment and work force recruitment in the auto industry, the traditional drivers are capacity needs, the rise of new competitors, or a manufacturer’s foray into a new product area.

But lately, another factor is driving industry growth: technology.

Cree Inc. is an illustration of what happens when a tech supplier suddenly finds opportunity beckoning in automotive.

Cree, a North Carolina company that derives most of its business from LED lighting and cellphones, is spending $1 billion on two U.S. sites to feed emerging demand for its silicon carbide materials, a technology now being embraced for auto industry electrification.

Cree’s investment covers the expansion of its existing mega materials factory in Durham, N.C., and the construction of a 480,000-square-foot wafer fabrication facility in Marcy, N.Y.

Cree aims to have nearly 240 workers in the Marcy facility by the end of 2023 and more than 600 there during the following five years. Cree’s overall head count in North Carolina will also continue to grow.

“When we announced the $1 billion expansion and 30-times capacity increase, we were able to project a much lower [unit] cost because of the increase in volume,” said Kenric Miller, vice president of global sales and marketing for automotive at Cree.

“With our announcements and what our investments are, we’re going to dramatically be lowering the cost of silicon carbide, and by doing that, that’s enabling car companies to make that switch,” he added.

Compared with standard silicon-based semiconductors in electric vehicles, silicon carbide provides major benefits, Miller said.

“It allows the vehicle to go 5 to 10 percent farther on the same battery,” he said.

Silicon carbide also can handle higher voltages better than silicon. That will allow for the design of EVs with batteries of, for example, 800 volts instead of 400, which in turn supports faster battery charging.

“In the past two years, we’ve seen a huge shift in terms of car companies wanting to move from silicon to silicon carbide to drive their motors for electric vehicles,” he said.

Of the auto companies Cree regularly works with globally, only one was committed to using silicon carbide in 2017. In August 2018, about 40 percent expressed an interest. In August 2019, 90 percent of customers were committed to using silicon carbide by 2025.

“With that, one of the concerns that car companies have is, will there be enough supply?” Miller said.

Hence the investment in North Carolina and New York.

Automotive makes up only about 5 percent of Cree’s business. But Cree has begun signing major deals, including partnerships with Volkswagen, major Tier 1 suppliers Delphi and ZF, and industrial and automotive manufacturer ABB.

“We see dramatic growth in the automotive space and automotive becoming our largest market,” Miller said. “As EVs take off, we think by 2024 or 2025, [automotive] will be 50 percent of the business.

“What we’re building in New York isn’t the end,” he added. “We’ll know eventually we’ll have to have more.”

Subscribe for the latest Celebrity Gossips

Spread the love

Leave a Reply

Next Post

GM isn't traveling alone into the EV era

DETROIT — General Motors’ latest strategy: Give and take. Partnerships with Honda Motor Co., electric vehicle startup Nikola Corp. and battery supplier LG Chem show GM’s willingness to share technology […]