SK Siltron CSS Invests $300M in US for EV Supply Chain

U.S. Semiconductor Strength Amidst EV Production Lag

Recent analysis from the International Council on Clean Transportation indicates that the United States has experienced a decline in electric vehicle (EV) production and adoption relative to China and Europe, particularly between 2017 and 2020. Despite this, the U.S. maintains a leading position in the crucial area of semiconductor manufacturing – a component essential for a wide range of technologies, including smartphones, computers, and EVs.

SK Siltron CSS Investment in Michigan

SK Siltron CSS, a subsidiary of South Korean firm SK Siltron, has announced a significant $300 million investment. This expansion will establish new operations in Bay County, Michigan, located approximately two hours north of Detroit, a historic center for the automotive industry.

The investment is projected to generate up to 150 highly skilled jobs. Given the company’s existing facility in nearby Auburn, this new factory will effectively more than double its current workforce.

Over the next three years, SK Siltron intends to develop both manufacturing and research & development capabilities focused on advanced materials specifically for electric vehicles.

Strengthening the Domestic EV Supply Chain

According to Jianwei Dong, CEO of SK Siltron CSS, as reported by Reuters, the $300 million investment is strategically aimed at “developing a domestic EV supply chain based in Michigan,” leveraging proximity to key customers.

This development coincides with a growing wave of new electric vehicle models and substantial investments in electrification initiatives from American automakers.

These automakers include established companies like General Motors and Ford, alongside innovators such as Tesla and emerging brands like Rivian.

Geopolitical Context and Government Support

The investment also occurs within the context of ongoing trade tensions between China and the United States.

While China currently dominates global EV production, accounting for 44% of all vehicles manufactured between 2010 and 2020, the U.S. has consistently restricted China’s access to semiconductor technology by blocking acquisitions of chipmakers.

The ICCT report highlights that successful strategies in both China and Europe have involved strong policies that incentivize both EV production and consumer demand.

The Biden administration’s proposed $174 billion investment in EV subsidies and charging infrastructure could potentially help the U.S. regain lost ground.

Government and Economic Development Perspectives

U.S. Secretary of Commerce Gina M. Raimondo emphasized the importance of establishing robust domestic supply chains to support both businesses and consumers as the nation transitions to a more sustainable future.

She stated that the electric vehicle sector presents a significant opportunity for the automotive industry, and expressed enthusiasm for SK Siltron CSS’s expansion as a contribution to a greener future.

Projected Economic Impact and Workforce Development

While final approval from state and local authorities is still required, the SK Siltron CSS expansion is expected to face minimal opposition.

The Michigan Economic Development Corporation reports that the state has actively sought to attract EV-related employment, investing nearly $9 billion and creating over 10,000 jobs in support of the EV transition over the past two years.

SK Siltron anticipates that 70% of the new hires will be skilled workers, with the remaining positions filled by professional engineers, as they collaborate with state and local agencies on recruitment efforts.

Understanding Semiconductor Wafers

A wafer represents a remarkably thin slice of semiconductor material. It functions as the foundational element in the production of integrated circuits, enabling the creation of smaller and more efficient semiconductor chips.

Serving as the base for the entire semiconductor construction, the wafer is an absolutely critical component in the manufacturing process.

The increasing demand for semiconductors within the electric vehicle (EV) industry stems from their ability to facilitate higher voltage battery operation. They also drive the powertrain and enable advanced features like touchscreen interfaces.

Silicon Carbide Wafer Technology

SK Siltron specializes in wafers composed of silicon carbide. This material offers superior capabilities compared to traditional silicon, specifically in terms of power handling and thermal conductivity, according to the company.

Silicon carbide’s enhanced properties allow for a more effective transfer of electrical energy from the battery to the motor when integrated into EV systems.

This improved efficiency translates directly into an extended driving range for electric vehicles, potentially increasing it by 5% to 10%, as stated by SK Siltron.