LPO announces conditional commitment to SK siltron CSS to expand american manufacturing of high-quality silicon carbide wafers for electric vehicle power electronics

The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to SK Siltron CSS, for a $544 million loan to expand American manufacturing of high-quality silicon carbide (SiC) wafers for electric vehicle (EV) power electronics. SiC semiconductors are designed for high-voltage use and are critical components of EV drivetrains, including inverters, and electrical distribution systems like onboard chargers and DC-to-DC converters. The project is expected to create up to 200 construction jobs in the build-out phase and up to 200 skilled, good-paying operations jobs at full production at the SK Siltron CSS facility located in Bay City, Michigan. The facility is projected to be among the top-five manufacturers of SiC wafers globally, boosting America’s manufacturing competitiveness and expanding our global leadership in the clean energy technologies of the future.

This project reinforces President Biden’s Investing in America agenda to onshore and re-shore domestic manufacturing technologies that are critical to meeting the Biden-Harris Administration’s ambitious goal that half of all new vehicles sold in 2030 are zero-emissions vehicles. Announcement also supports the President’s comprehensive strategy to build a safer, more sustainable transportation system and slash all greenhouse emissions from the transportation sector by 2050. The project will also help build a more resilient semiconductor supply chain and grow a diverse domestic semiconductor workforce to give American industry and workers across the nation a competitive edge on the world stage. 

Since President Biden took office, EV sales have more than quadrupled, with more than four and a half million EVs on the road. EVs contain about twice as many semiconductors as internal combustion engine vehicles. The adoption of high-voltage architectures will drive demand for SiC semiconductors globally as the EV market is expected to grow significantly in the years to come. The project will help meet growing market demand for EVs and establish a secure technology supply chain, which will create high-quality jobs and deliver new economic opportunities to surrounding communities.

SiC semiconductors allow for higher efficiency and higher voltage, which can mean faster charging times and up to 10% longer range when compared with traditional silicon semiconductors. However, semiconductors made from high-quality SiC wafers are required to maximize these performance improvements. High-quality wafers are currently under-supplied, and demand is expected to rise with EV sales, which saw unprecedented progress in 2023. 

If finalized, the LPO-financed project will help SK Siltron CSS leverage its two existing Michigan manufacturing plants to address this market gap. Historically, much of the research and development for the manufacturing process has occurred at the company’s facility in Auburn, Michigan. The expanded Bay City plant will use technology developed in Auburn to create the high-quality wafers needed to realize President Biden’s EV goals.

The company will partner with Delta College, less than a mile from the project site, through the Michigan New Jobs Training Program to train local workers for success in SiC wafer manufacturing. In addition, LPO works with all borrowers to create quality jobs during construction, operations, and throughout the life of the loan and works to ensure borrowers develop and ultimately implement a strong Community Benefits Plan. 

The project site is located near disadvantaged communities and is expected to benefit local communities and local workers, aligning with the Biden-Harris Administration’s Justice40 Initiative, which set a goal that 40 percent of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution. 

The loan would be offered through LPO’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which supports domestic manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy. With several recent ATVM projects in the last year, LPO is helping support the Biden-Harris Administration’s ambitious clean energy and climate goals.

While this conditional commitment indicates the Department’s intent to finance the project, the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan.