Infineon to acquire Wolfspeed for SiC power and GaN RF technologies

Infineon to acquire Wolfspeed for SiC power and GaN RF technologies

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Infineon has announced that it intends to buy the Wolfspeed Power and RF division (“Wolfspeed”) of Cree. The deal also includes the related SiC wafer substrate business for power and RF power. The purchase price for this planned all-cash transaction is $850 million (approximately €740 million).
By Graham Prophet

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Infineon says that the acquisition will “further strengthen” its position as a supplier of power and radio-frequency (RF) power solutions in high-growth markets such as electro-mobility, renewables and next-generation cellular infrastructure relevant for the Internet of Things (IoT).

 

The acquisition, Infineon adds, enables Infineon to provide, “ the most compelling power solutions with the broadest offering in compound semiconductors including silicon carbide (SiC), gallium nitride on silicon (GaN-on-Si), and gallium nitride on silicon carbide (GaN-on-SiC).”

 

Infineon previously purchased International Rectifier, a deal which also brought with it alternatives to silicon in power devices; some of the first commercial introductions of gallium nitride, in the power space, were by IR. Infineon has taken a cautious approach to GaN, with its public statements on the technology noting the continuing improvements in silicon switches, and identifying specific market segments where GaN is likely to make major inroads, such as high-density power conversion and distribution in server farms. Infineon already has its own product lines in SiC (“CoolSiC”) in diodes, transistors and in power modules – as does its new acquisition Wolfspeed. See, for example, “1200V, 325A silicon carbide module…”.

Dr. Reinhard Ploss, CEO of Infineon Technologies AG, said: “…Wolfspeed’s and Infineon’s businesses and expertise are highly complementary, bringing together industry leading experts for compound semiconductors…. With Wolfspeed we will become number one in SiC-based power semiconductors. We also want to become number one in RF power.”

 

Infineon’s statemen continues, “Wolfspeed is based in Research Triangle Park, North Carolina, USA, and has been a part of Cree for almost three decades. Wolfspeed is a premier provider of SiC-based power and GaN-on-SiC-based RF power solutions. This also includes the related core competencies in wafer substrate manufacturing for SiC, as well as for SiC with a monocrystalline GaN layer for RF power applications. With these competencies, more than 550 highly skilled employees and a strong IP portfolio of approximately 2,000 patents and patent applications, this deal complements Infineon’s previous acquisition of International Rectifier in early 2015. Wolfspeed’s SiC-based product portfolio ideally adds to Infineon’s offering.

 

“Major areas where the applications will profit from SiC are renewables and especially automotive. Both areas benefit from the increased power density and improved efficiency. In automotive it fits well with the recent increased commitment of the industry to plug-in hybrid and all-electric vehicles (xEV). Combining both portfolios and competencies will significantly accelerate the time-to-market for new products based on compound semiconductors.

 

Turning to the RF power domain, Infineon notes, “ Next-generation cellular infrastructure standards such as 5G and beyond will use frequencies up to 80 GHz. Only advanced compound semiconductors can deliver the required efficiencies at these high frequencies. GaN-on-Si allows higher levels of integration and offers its advantages at operating frequencies of up to 10 GHz. GaN-on-SiC enables maximum efficiency at frequencies of up to 80 GHz. Both technologies are crucial for next generation cellular infrastructure standards. Together with its Si-based LDMOS products Infineon is the industry’s most complete provider for RF power components.”

 

Infineon also anticipates benefiting from accelerating SiC- and GaN-based components’ entry to early-adopter markets, e.g. electro-mobility, high-end photovoltaic inverter, xEV charging infrastructure, and RF power components in cellular infrastructure.

 

The business to be acquired by Infineon, the statement adds, has generated revenues of $173 million in the twelve months ending March 27, 2016. Infineon will fund the transaction with bank financing (borrowing) of $720 million and $130 million cash; the company says it has previous committed to a capital structure including cash reserves of €1 billion plus 10 to 20% of revenue, and that after this deal it remains “well within” those bound.

 

The closing of the transaction is subject to regulatory approvals in various jurisdictions and is expected by the end of calendar year 2016.

 

Infineon; www.infineon.com

 

Cree; www.cree.com

 

 

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