China dominates the electric vehicle supply chain, from processing raw minerals like lithium into chemicals for batteries all the way to building finished cars. But there’s one niche where America still has an edge: chips made from an exotic material called silicon carbide.
In EVs, these chips are used in inverters, which sit between the car’s battery and motors, converting the direct-current electricity the battery supplies into the alternating current the motors require. Such chips always lose some energy as heat, but silicon carbide chips lose far less than those made of conventional silicon. That difference can boost the range of an electric car 5% to 15%.
But the raw material for silicon carbide chips is difficult to manufacture. North Carolina–based Wolfspeed supplies about three-quarters of the world's silicon carbide wafers—the thin discs on which chips are made, according to Piper Sandler analyst Harsh Kumar. Wolfspeed sells the wafers to major automotive chip firms including STMicroelectronics, Infineon and Onsemi, but also makes finished chips itself. In the coming weeks, Wolfspeed will open a $1 billion factory in upstate New York to boost its efforts to compete directly with those customers in making and selling the finished chips.