Leading silicon carbide chipmaker Wolfspeed joined German officials to announce construction of what it said would be the world’s largest silicon carbide device factory. The campus in Ensdorf, Germany, also will contain a large research facility, where ZF Group will partner with Wolfspeed to study new uses of silicon carbide.

The plant, which will make 200mm wafers and is part of Wolfspeed’s $6.5 billion investment in higher capacity, will be built on a site currently occupied by a decommissioned coal-burning power plant. The 35-acre project takes advantage of multiple government efforts, chiefly the Important Projects of Common European Interest (IPCEI). The state aid package must still be approved by the European Commission.

Gregg Lowe, president and CEO of Durham, N.C.-based Wolfspeed, touted the efficiency benefits of silicon carbide devices in this tipping-point moment of electric vehicle (EV) development. “This facility will be crucial to supporting our expansion in a capacity-constrained industry that is growing very rapidly, especially across the EV marketplace,” he said, adding that it was important to have a plant closer to European clients.

The Wolfspeed-ZF strategic partnership will develop silicon carbide devices for mobility, industrial and energy applications, the companies said in a joint statement. The partnership also includes an investment ─ the news release called it “hundreds of millions of dollars” by ZF in the construction of the site, for which ZF will receive stock in Wolfspeed.

ZF CEO Holger Klein stressed the ability of the plant to help address supply shortages, saying the site will “strengthen European supply resilience, and at the same time, support the European Green Deal and the strategic goals for Europe’s Digital Decade.” Initial research will concentrate on increasing efficiency and power density for electrification applications.

Both companies said other partners could be invited to participate in the research, eventually establishing what they called a “European silicon carbide innovation network.” Stephen von Schuckmann, a member of ZF’s Board of Management, said the partnership is a good marriage of Wolfspeed’s 35 years of SiC experience and his company’s leadership across overall electrical and mobility systems, including “passenger cars, commercial vehicles, construction machinery, wind power and industrial applications.”

Wolfspeed CEO Lowe said that the $3 billion plant could start production as early as 2027 if plans and heavy subsidies are approved in a timely way. Wolfspeed said that in addition to clearing the coal-plant site, the new 600-person factory would make efforts to be more sustainable, including recycling more water than other plants and reducing emissions.

The announcement in Ensdorf was attended by company and government officials, including German Chancellor Olaf Scholz. Ensdorf is about 190 miles (305 km) southeast of Frankfurt.