Investments · Semiconductors
Denso and Mitsubishi Electric invest $1 billion in Coherent's silicon carbide unit
- Investor
- Denso and Mitsubishi Electric (Kariya, Aichi / Tokyo)
- In
- Coherent (silicon carbide business), Saxonburg, Pennsylvania
- Value
- $1B ($500M each for 12.5% each)
- Status
- Completed.
- Date
- 2023-10-10
Denso and Mitsubishi Electric each agreed to invest $500 million in Coherent's silicon carbide business for a 12.5% non-controlling stake apiece, with Coherent keeping 75%. The unit will sign long-term supply deals with both companies for 150mm and 200mm silicon carbide substrates and epitaxial wafers.
Why it matters
Silicon carbide power chips are central to EV inverters, and the stakes lock in scarce substrate supply for two of Japan's biggest power electronics makers.
The deal
The deal was announced on October 10, 2023 and closed on December 4, 2023, earlier than the first-quarter 2024 target. Coherent moved the silicon carbide business into a new subsidiary that it controls and runs. By our math, the terms value the whole business at about $4 billion. The unit pays its own operating and capital costs.
Where the wafers go
Denso said the deal secures a steady supply of silicon carbide wafers for battery electric vehicles. Mitsubishi Electric said it expects demand for silicon carbide power chips to grow exponentially, and it was planning a 200mm wafer plant in Kumamoto, Japan. Coherent cited estimates that the silicon carbide market would grow from $3 billion in 2022 to $21 billion in 2030.
Coherent's side
Coherent chief executive Vincent Mattera called the separate subsidiary with partner investors the best way to maximize shareholder value. The money funds faster capacity growth. The business is still led by Sohail Khan, and the supply contracts with both Japanese companies are on arm's-length terms.
Sources
Kakehashi M&A News home
