The US Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to SK Siltron CSS, LLC for a $544-million loan to expand US 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 such as onboard chargers and DC-to-DC converters.

The facility is projected to be among the top-five manufacturers of SiC wafers globally, boosting US manufacturing competitiveness.

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.

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.

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.

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 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.

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.