Plans for a multi-billion-euro chip plant for EVs on brink of collapse – media reports

Plans for a 2.75 billion euro cutting edge silicon carbide chip plant in Germany are up in the air, amid reports that construction has been put on hold indefinitely and that one of the major partners may have pulled out of the deal. US semiconductor business Wolfspeed had planned to build a plant for energy-saving silicon carbide chips used in electric cars in the western German state of Saarland, bordering France and Luxemburg, by 2027, according to Handelsblatt. German car manufacturer ZF Friedrichshafen wanted to invest 170 million euros in the project. 

But Handelsblatt reported that ZF was pulling its investment, while industry sources told the paper that Wolfspeed had delayed the project indefinitely due to weak demand for electric cars. In contrast, public broadcaster Südwestrundfunk (SWR) reported that ZF said it remained committed to the project and, instead, referred to major delays for which their US partner Wolfspeed is responsible.

Handelsblatt reported that ZF potentially ditching the project wasn't a surprise to industry players, as the company was facing the same challenges as other manufacturers involved in the switch to electric vehicles. The firm is highly indebted and is set to cut up to 14,000 jobs in Germany, wrote the media outlet. Wolfspeed is also in the red and CEO Gregg Lowe has not commented on the project in Saarland for months, according to the article. 

When the ZF and Wolfspeed plant was announced in 2023, chancellor Olaf Scholz called it an important step in readying Germany's car industry for the transition to electric vehicles. If the project is scrapped, it would be a further blow to Germany's ambitions to build a major chip facility in the country, wrote Handelsblatt. In September, US chip manufacturer Intel announced it would likely put the construction of a multi-billion-euro plant in Magdeburg on ice for two years.