Cree Inc., a pioneer in commercializing LED lights, is recasting itself as a key player in electric cars by marketing semiconductors it says can boost battery performance.
The Durham, North Carolina-based company expects global demand for silicon-carbide materials and computer chips to surge to $9 billion by around 2025, about half of which will come from the auto industry, Chief Executive Officer Gregg Lowe said in an interview.
“A significant portion of that business is going to be awarded over the next six to 18 months,” Lowe said. Several automakers are evaluating Cree’s technology for use in electric-vehicle components such as power converters, inverters and charging stations. “Automotive is now really the center of our attention in terms of what’s driving the industry.”
Cree, which is already a supplier to Tesla Inc. and recently inked development deals with Volkswagen AG and auto-parts maker Delphi Technologies Plc, wants to replace standard silicon with silicon carbide. Lowe said that can increase the efficiency of batteries by six percent to ten percent, extending vehicle range or minimizing battery size and weight.
Best known for its light emitting diodes, or LEDs, Cree made a strategic shift two years ago toward production of silicon-carbide semiconductors for auto and telecommunications applications. In May, it announced plans to spend $1 billion boosting manufacturing capacity by as much as 30-fold, two months after selling off its lighting business.
Trade tensions and slowing global car sales present near-term challenges, but Cree’s CEO said he’s confident the U.S. and China will reach a deal eventually and that demand for EVs will grow steadily over the next decade.
The company cut its fourth-quarter earnings forecast in June, blaming softer-than-expected demand and the Trump administration’s decision in May to block sales of critical components to China’s Huawei Technologies Co.