Cree Intends To Build New SiC Wafer Power Plant In New York
Zacks Investment Research | Sep 23, 2019 10:46PM ET
Cree Inc. (NASDAQ:CREE) recently signed an agreement with the office of Governor Andrew M. Cuomo, local agencies and entities to build an advanced RF wafer manufacturing facility in Marcy, NY.
In this regard, the company plans to invest $1 billion. The new wafer manufacturing facility is expected to deliver 25% more output as compared to the formerly scheduled facility.The company anticipatestotal net capital savings to be around $280 million through 2024.
The construction is likely to commence around 2022, with an area of up to 480,000 square foot. The company is witnessing strong revenue growth from the core market. To meet the increasing demand for Silicon Carbide (SiC), it has undertaken an expansion plan in the region.
The new facility aims at developing state-of-the-art technologies and an automated 200 mm silicon carbide fabrication facility for the production of SiC wafer to cater to the power electronics market. These moves are aimed at decreasing time to market for end customers and time to revenue for ecosystem participants.
Presently, Cree is producing the 200-mm chips at its U.S. campus headquarters in Durham, NC.
The partnership will help Cree expand its Wolfspeed business portfolio and bolster position as a supplier of power and RF GaN-on-SiC power solutions. Furthermore, Wolfspeed has been an operating arm of the company for more than 30 years. It has garnered an unparalleled reputation among clients for providing state-of-the-art SiC-based power and GaN-on-SiC-based RF power solutions.
We also note that the new fabrication facility of the RF power business will help the company enhance its competitive position against peers like Analog Devices (NASDAQ:ADI) and Qorvo (NASDAQ:QRVO) , among others, in the power solutions market.
What Investors Need to Know?
Shares of Cree have returned 20.6% on a year-to-date basis, outperforming the Zacks Investment Research
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