Targeting Third-Generation Semiconductors: New Wafer Facility Secures Subsidy

With the rapid growth of downstream industries such as renewable energy, 5G, and photovoltaics, third-generation semiconductors—represented by silicon carbide (SiC) and gallium nitride (GaN)—are seeing unprecedented development. Semiconductor giants are expanding their presence, and governments worldwide, including the United States, are increasing subsidies to accelerate advancements in this critical sector.

Bosch Secures $225 Million Subsidy for Silicon Carbide Production

The U.S. Department of Commerce recently announced a preliminary agreement with Bosch, the German automotive supplier, to provide $225 million in direct funding and $350 million in loans. These funds will support Bosch's project to transform its California-based wafer fab into a silicon carbide production facility.

In 2023, Bosch acquired TSI Semiconductors, gaining ownership of an 8-inch wafer fab in Roseville, California. The company has pledged to invest $1.9 billion to retrofit the facility for SiC production, with plans to commence operations by 2026. According to the Department of Commerce, Bosch's facility is expected to account for over 40% of the U.S. silicon carbide chip manufacturing capacity once fully operational.

Bosch highlighted that silicon carbide enables greater driving range and more efficient charging for electric and plug-in hybrid vehicles, making EVs more accessible to consumers. In addition to the direct funding and loans, Bosch plans to apply for a 25% advanced manufacturing investment tax credit from the U.S. Treasury Department.

GlobalFoundries Expands GaN Efforts with U.S. Subsidies

GlobalFoundries (GF) has also been awarded $9.5 million by the U.S. government to advance the production of silicon-based gallium nitride (GaN) semiconductors at its Essex Junction facility in Vermont. The funding will enable GF to enhance its GaN IP portfolio, reliability testing, and prototype development capabilities, furthering its goal of mass-producing 8-inch GaN chips in Vermont.

This new funding builds on a series of substantial subsidies received by GF since 2020, including $35 million in federal funding announced in October 2023. These investments have been instrumental in supporting GF's research, development, and manufacturing of GaN chips.

In terms of business expansion, GF acquired Tagore Technology's GaN power product portfolio in July 2023 and established a power center in Kolkata, India. This center collaborates closely with GF’s Vermont fab, supporting its R&D and mass production efforts in the GaN semiconductor market.

Third-Generation Semiconductor Momentum

The significant subsidies received by Bosch and GlobalFoundries underscore the strategic importance of third-generation semiconductors. As industries like electric vehicles, renewable energy, and telecommunications demand higher efficiency and performance, silicon carbide and gallium nitride technologies are poised to play a pivotal role in meeting these needs.

By investing heavily in SiC and GaN manufacturing, companies like Bosch and GF are not only advancing their technological capabilities but also strengthening their positions in the highly competitive semiconductor market.