Denso Corp. and Mitsubishi Electric Invest $1B in Coherent’s Silicon Carbide Business
Japanese Companies Support Coherent’s Silicon Carbide Unit
Japanese companies, Denso Corp. and Mitsubishi Electric, have made a significant investment of $1 billion into Coherent’s silicon carbide business. This investment will provide a much-needed boost to Coherent’s operations and enable the company to expand its manufacturing capacity.
Coherent’s Key Role in Electric Vehicle Industry
Coherent’s silicon carbide business, located in Saxonburg, Pa., plays a crucial role in the electric vehicle (EV) industry. The company produces silicon carbide wafers, which are essential components for EVs. These wafers help improve charging times and extend the range of electric vehicles.
Valuation and Ownership Distribution
Denso Corp. and Mitsubishi Electric will each own a 12.5% stake in Coherent’s silicon carbide unit, valuing it at $4 billion. Coherent will maintain a 75% ownership and continue to operate the business as an independent subsidiary. In addition to the investment, long-term supply agreements have been established between Coherent and both investors.
Strategic Importance of Silicon Carbide Technology
This joint investment highlights the increasing importance of silicon carbide technology in the rapidly growing electric vehicle industry. Denso Corp. and Mitsubishi Electric’s involvement showcases their strategic moves to secure their positions in the supply chain of this critical component.
Implications for EV Manufacturers
The investment in Coherent’s silicon carbide business is excellent news for EV manufacturers. With Coherent’s enhanced manufacturing capacity, the production of silicon carbide wafers will be further optimized. This advancement will ultimately benefit EV manufacturers by improving charging efficiency and extending the range of electric vehicles.
Conclusion
The $1 billion investment from Denso Corp. and Mitsubishi Electric in Coherent’s silicon carbide business marks a significant milestone for the electric vehicle industry. This strategic move highlights the growing importance of silicon carbide technology and the commitment of these Japanese companies to stay ahead in the EV supply chain. With this investment, Coherent is well-positioned to meet the increasing demand for silicon carbide wafers and contribute to the continued growth of the electric vehicle industry.
