SK Siltron to invest $300 mn in US capacity expansion

Auburn, Michigan – South Korea’s silicon wafer maker SK Siltron Co. will invest $300 million to increase production capacity by ten times by 2025 in the US to meet surging demand. The company also aimed to complete the construction of a new factory in the second half of this year in Bay City, Michigan.

The world’s No. 5 wafer manufacturer is currently producing at its factory in Auburn, Michigan, a specialty wafer made of silicon carbide (SiC) that can be used in the semiconductor power components of electric vehicles whose demand has been soaring.

A SiC wafer often improves EV’s efficiency as it withstands high temperatures and pressures more than the existing silicon wafer, reducing power loss. Semiconductors with SiC wafers enhance the charging speed of EVs by 75% and increase mileage by 7.5%, according to SK Siltron.

“Demand for SiC-based chips is expected to significantly rise as EVs need to drive far on a single charge,” said SK Siltron CEO Jang Yong-ho. “We plan to start mass production of SiC wafers at the Gumi plant from the second half of this year in cooperation with the Auburn factory,” Jang said, referring to its facilities in the Province of Gyeongsangbuk-do, South Korea.

The global SiC wafer sector is rapidly growing with the market expected to report double-digit growth every year to $3.6 billion in 2030 from $61 million in 2020, according to Boston Consulting Group.

Earlier this week, SK Siltron announced a plan to spend 1 trillion won ($821.9 million) on capacity expansion in South Korea by the first half of 2024, from which it plans to ramp up output.

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SK Siltron bought the Auburn plant from US industrial materials maker DuPont for $450 million in 2020. The factory logged double-digit growth in annual sales since then, more than tripling the number of staff to 160 from 50 in two years. It is competing with major players such as Wolfspeed Inc.

SK Siltron’s new factory in Bay City is set to create 200 jobs more there.

US Trade Representative Katherine Tai, who visited the company’s Auburn factory on March 16, praised the firm as an exemplary case of the economic cooperation between the US and South Korea.

“This partnership between our two countries is an excellent example of how we can harness the innovation and talent of our citizens to create a cleaner, more sustainable economy while also creating good-paying jobs along the way,” Tai said.

Write to In-Seol Jeong at surisuri@hankyung.com
Jongwoo Cheon edited this article.