By Stephen Nellis
(Reuters) – Chipmaker Wolfspeed Inc on Monday announced an agreement with General Motors to supply silicon carbide power devices for future electric vehicle programs, with Wolfspeed changing its name to Cree Inc.
Wolfspeed technology will be used in the integrated power electronics of GM’s Ultium Drive system for future electric vehicles, the two companies said.
Shares of Cree Inc previously traded on the Nasdaq Global Select Market, and newly renamed Wolfspeed in North Carolina, will now trade on the New York Stock Exchange under the symbol “WOLF”.
The change comes as Wolfspeed has shifted its focus to the growing electric car market. The company once focused on manufacturing LED chips for lighting, but sold the business last year for $ 300 million to Smart Global Holdings Inc.
Wolfspeed makes chips from silicon carbide, which is more energy efficient than standard silicon for tasks such as transmitting power from an electric car’s batteries to the motors that turn the wheels. This increases the range of the vehicle. Tesla Inc was an early adopter of chips, and other automakers are following suit.
But silicon carbide chips are difficult to manufacture because the raw crystalline material has to be grown in special furnaces and made into chips differently from standard silicon.
Wolfspeed has been working with silicon carbide for 30 years. In addition to manufacturing its own silicon carbide chips, Wolfspeed manufactures approximately 60% of the raw silicon carbide material in the world and supplies it to some of its competitors such as Infineon Technologies, STMicroelectronics and On Semiconductor.
Wolfspeed is making chips at two small factories in North Carolina and building a larger one in New York City that will go live in about five months, according to the company.
Automakers “are looking for assurances of supply,” Gregg Lowe, chief executive of Wolfspeed, told Reuters.
(Reporting by Stephen Nellis in San Francisco; Additional reporting by Peter Henderson; Editing by Cynthia Osterman and Daniel Wallis)