The news that German auto parts manufacturer ZF is withdrawing from a $3 billion semiconductor manufacturing project with US semiconductor maker Wolfspeed has been reported.
https://www.reuters.com/business/autos-transportation/zf-pull-out-wolfspeeds-german-chip-plant-reports-handelsblatt-2024-10-22
🟦ZF pulls out of the billion project? : Reconsideration of the project
The joint project between ZF and Wolfspeed, announced in 2023, aimed at producing SiC power semiconductors in Germany. However, as forecasts for semiconductor demand weakened and the value of entering the European market was questioned, Wolfspeed put the project on hold. As a result, ZF has also indicated its intention to withdraw from the project. ZF planned to invest $ 185 million (about 280 billion yen) in the Saarland plant in Germany.
ZF
ZF, headquartered in Germany, is a leading manufacturer of automotive components. In particular, it is famous for its components for car transmissions, safety technology and electric vehicles. In recent years, we have also been focusing on the development of technologies for electric vehicles (EVs).
Wolfspeed
Wolfspeed is a semiconductor manufacturer based in the United States with high technological capabilities in the field of “power semiconductors” for electric vehicles and renewable energy.
🟦 Reasons for project withdrawal
One of the main reasons why Wolfspeed put the project on hold is the decline in demand for semiconductors and the weak demand in the electric vehicle market. The growth of electric vehicles, especially in the European market, has not been as much as expected, and the situation has led to a need to re-evaluate the continuing value of the project. In addition, soaring energy costs and stringent regulations have also increased concerns about production activities in Germany.
🟦Summary
The withdrawal of ZF and Wolfspeed from the project is an important event that will have a significant impact on the European semiconductor industry. The move is due to sluggish demand in the electric vehicle market and production cost issues, which also poses serious challenges for the German manufacturing industry.
Like Wolfspeed, Intel has also postponed the construction of its plant in Germany, and TSMC has not yet started construction. If the subsidy decision is delayed, the project itself may be canceled. On the other hand, the smooth progress of the construction of the TSMC plant in Japan was probably largely due to the speedy response.
