II-VI Incorporated Closes $100 Million Contract to Supply Tianyu with Silicon Carbide Substrates for Power Electronics

Rhea-AI Summary

II‐VI Incorporated (Nasdaq: IIVI) announced a significant contract exceeding $100 million with Dongguan Tianyu Semiconductor Technology. This agreement involves the supply of 150 mm silicon carbide substrates, starting this quarter and extending into 2023. The deal aims to meet the surging demand for silicon carbide power electronics driven by the electrification of transport and industrial machinery. II-VI's strategic partnership positions Tianyu to capitalize on the expanding markets for electric vehicles and renewable energy, while also reducing carbon emissions and enhancing energy efficiency.

Positive

• Secured over $100 million contract with Dongguan Tianyu Semiconductor for 150 mm SiC substrates.
• Contract supports long-term demand in the rapidly growing power electronics market, particularly for electric vehicles.
• Strategic partnership enhances II-VI's capacity to supply SiC substrates, increasing its market position in Asia.

Negative

• None.

PITTSBURGH, Aug. 17, 2022 (GLOBE NEWSWIRE) -- II‐VI Incorporated (Nasdaq: IIVI), a leader in wide-bandgap compound semiconductors, today announced that it closed an over $100 million contract to supply Dongguan Tianyu Semiconductor Technology Co., Ltd., with 150 mm silicon carbide substrates to be delivered beginning this quarter and through the end of calendar year 2023.

The electrification of the transportation infrastructure and industrial equipment is accelerating a market transition to power electronics based on silicon carbide (SiC), a third-generation or wide-bandgap semiconductor. SiC enables power electronics to be smaller and more efficient, with a lower total system-level cost of ownership than state-of-the-art silicon-based devices. Tianyu, one of China’s first and largest SiC epitaxial wafer manufacturers, has signed a long-term supply contract with II-VI, with upfront payments, to secure 150 mm SiC substrate capacity that will meet its demand through calendar year 2023.

“In November 2021, we were pleased to announce that Tianyu had selected II-VI as its primary strategic partner for the supply of 150 mm SiC substrates for power electronics,” said Sohail Khan, Executive Vice President, New Ventures & Wide-Bandgap Electronics Technologies Business Unit. “With the end-demand ramping up significantly, it became essential for Tianyu to secure its supply with this long-term, high-volume contract, which will be recurring and grow in value over time.”

To meet the market demand in Asia, II-VI established in 2021 a backend processing line for SiC substrates, in over 50,000 sq. ft. of new cleanroom space, at II-VI’s Asia Regional Headquarters in Fuzhou, China. Tianyu will benefit from II-VI’s 150 mm SiC global production capacity in both the U.S. and in China.

Tianyu and II-VI will provide the high-quality and reliable supply chain and future 200 mm capability that will be critical to support the rapidly growing demand for SiC power electronics in the megamarkets of electric vehicles (EVs), renewable energy, smart grids, microgrids, and power supplies for data networks. Tianyu is well positioned to serve the power electronics market for EVs in China, today the largest in the world by far.

Given their broad range of applications, power electronics based on SiC have a highly beneficial impact on the environment through enabling significant reductions in carbon dioxide emissions and energy consumption.

About II-VI Incorporated

II-VI Incorporated, a global leader in engineered materials and optoelectronic components, is a vertically integrated manufacturing company that develops innovative products for diversified applications in communications, industrial, aerospace & defense, semiconductor capital equipment, life sciences, consumer electronics, and automotive markets. Headquartered in Saxonburg, Pennsylvania, the Company has research and development, manufacturing, sales, service, and distribution facilities worldwide. The Company produces a wide variety of application-specific photonic and electronic materials and components, and deploys them in various forms, including integrated with advanced software to support our customers. For more information, please visit us at www.ii-vi.com.

CONTACT:		Mark Lourie
		Vice President, Corporate Communications
		corporate.communications@ii-vi.com
		www.ii-vi.com/contact-us

 

FAQ

What contract did II-VI announce on August 17, 2022?

II-VI announced a contract exceeding $100 million to supply Dongguan Tianyu Semiconductor with 150 mm silicon carbide substrates.

How will the contract with Tianyu impact II-VI's business?

The contract will enhance II-VI's position in the power electronics market, particularly for electric vehicles and renewable energy.

What are silicon carbide substrates used for?

Silicon carbide substrates are used in power electronics, facilitating smaller, more efficient systems and reducing total cost.

How long will the silicon carbide substrates be supplied to Tianyu?

The silicon carbide substrates will be delivered beginning this quarter and continuing through the end of calendar year 2023.

What is the significance of the partnership between II-VI and Tianyu?

The partnership secures a reliable supply chain and supports the growing demand for SiC power electronics in major markets.