Department of Energy hopes to build a more secure and resilient semiconductor supply chain for EV manufacturing in the U.S.

Once again investing in the future of secure, domestic manufacturing, the U.S. Department of Energy, through its Loan Programs Office (LPO) has conditionally committed to loan SK Siltron CSS, LLC $544 million to expand American production of high-quality silicon carbide (SiC) wafers for electric vehicles.

This more than half-a-billion-dollar loan toward a more resilient semiconductor supply chain supports President Biden's Investing in America agenda to onshore and re-shore domestic manufacturing technologies critical to meeting the ambitious goal of zero-emission vehicles making up half of all new car sales by 2030.

Designed for high-voltage applications and serving as a critical component in EV drivetrains, SiC semiconductors enhance efficiency and allow for increased power in electrical systems. This results in faster charging times and up to 10% longer range compared to traditional silicon semiconductors.

While semiconductors made from high-quality SiC wafers are required to maximize performance, inadequate supplies at optimal quality have caused manufacturers along EV supply chains to preemptively move ahead of the demand.

Offered through LPO's Advanced Technology Vehicles Manufacturing (ATVM) program, which supports domestic manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy, the loan does come with conditions.

While this commitment indicates DOE's intent to finance the project, SK Siltron must satisfy certain technical, legal, environmental, and financial conditions before the agency funds the loan.

Founded around the turn of the century, SK Siltron CSS is a compound semiconductor materials company that specializes in the research, development, and production of silicon carbide wafers.

With two major locations in the United States – both in Michigan – as well has half a dozen overseas, SK Siltron hopes to leverage the funding to boost its U.S.-based production of SiC wafers that it has endeavored to develop over more than two decades.

If it meets the conditions set forth in the commitment, one of its Michigan-based facilities is projected to reach among the top-five manufacturers of SiC wafers globally, significantly boosting America's manufacturing competitiveness and global leadership in clean energy technologies.

To help with this, SK Siltron will partner with Delta College, located less than a mile from the project site. Working through the Michigan New Jobs Training Program to train local workers for success in SiC wafer manufacturing, the facility upgrade should see 200 new construction jobs available in the build-out phase, with the same number once full production is underway.

As part of LPO procedure, during the life of the loan, the office works with borrowers to create these quality jobs during the construction, operations, and ultimately loan fulfillment to ensure borrowers develop as well as implement a strong Community Benefits Plan – a non-binding agreement to build surrounding infrastructure and amenities that enable better living standards in project surroundings.

As the project site is located near disadvantaged communities, the new facility is expected to benefit the region and local workers, further aligning with the Justice40 Initiative – which set a goal that 40% of the overall benefits of certain federal investments flow to marginalized citizens.