German powertrain supplier Vitesco Technologies has signed a long-term supply agreement with US semiconductor manufacturer Onsemi for silicon carbide products worth €1.75 billion over ten years to secure supply capacity as e-mobility ramps up.
The cooperation between Vitesco Technologies and Onsemi takes place on several levels. On the one hand, there is the above-mentioned supply agreement for silicon carbide products with a volume of 1.75 billion euros. At the same time, both companies are making a joint investment in Onsemi’s manufacturing capacities, with Vitesco’s share amounting to 230 million euros. And thirdly, both companies intend to cooperate in the optimisation of drive inverters.
The SiC semiconductors mentioned in the supply agreement – specifically the Onsemi EliteSiC MOSFET product – Vitesco wants to use in inverters and drive to serve recent orders as well as future projects. The silicon carbide in the semiconductors is known to increase the efficiency of the inverters and drives, which is said to lead to improved performance, faster charging speeds and greater range. Conversely, the inverters themselves can become smaller and the corresponding cooling systems can also be made smaller due to the lower heat loss, further reducing energy requirements.
Onsemi also counts Volkswagen, BMW, Hyundai-Kia and Zeekr among its customers. Now Vitesco, a major German supplier, is joining the list. Onsemi CEO Hassane El-Khoury says: “This collaboration will enable Vitesco Technologies to address their customers’ demand for longer range and higher performance in electric vehicles. Onsemi provides superior performance and quality, supply assurance, and manufacturing at scale of SiC technologies based on decades of experience in manufacturing power semiconductor products in high volume automotive applications.”
Andreas Wolf, CEO of Vitesco Technologies, states that energy-efficient silicon carbide power semiconductors are facing a huge surge in demand. “That is why it is imperative for us to get access to the complete SiC value chain together with Onsemi. With this investment, we have a secure supply of a key technology over the next ten years and beyond.”
Vitesco signed a cooperation agreement with Infineon in 2022 for the supply of silicon carbide power semiconductors. Vitesco also intends to cooperate with Infineon on development. However, financial details, scope of supply or the duration of the agreement were not made public at the time. Another supply agreement on SiC chips with Rohm Semiconductor dates back to 2020.
A few weeks ago, Vitesco presented its business balance sheet for the year 2022. In the course of this, Vitesco announced that it had surpassed the one billion euro milestone in turnover with electrification products. With electric motors and the like, Vitesco turned over about 1.1 billion euros last year, compared to 0.9 billion euros in 2021. As the supplier announced in March, electrification products will become increasingly important and soon account for the majority of sales. This is because: Vitesco recorded incoming orders of 14 billion euros in the 2022 financial year, of which 10.4 billion euros were for electrification products. In total, Vitesco had an order backlog of 58.5 billion euros as of 31 December 2022, 46 per cent of which was in the electrification sector – and the trend is strongly upwards.
Keyword: Vitesco signs long-term semiconductor supply deal with Onsemi