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.