(Reuters) -Wolfspeed has shelved plans to build a semiconductor factory in Ensdorf, Germany, due to slower electric vehicle adoption, the U.S. chipmaker said on Wednesday.
The chipmaker said in June it had delayed plans to build the $3 billion plant, which would make, in Germany, computer chips used in electric cars, highlighting the European Union’s struggle to increase semiconductor production and reduce its reliance on Asian chips.
The demand for silicon carbide chips that were to be produced in the factory is largely driven by the global EV adoption, and it is also used in industrial and energy applications.
Wolfspeed announced its plans for the plant and a research and development center in Germany in February 2023. The move represents another setback for German efforts to sell the country as an attractive location for business.
An industry source told Reuters on Tuesday that the German automotive supplier ZF had intentions to withdraw from the planned $3 billion microchip manufacturing project with Wolfspeed in western Germany.
The Financial Times first reported the news.
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(Reporting by Priyanka.G in Bengaluru and Murray Miranda in Berlin; Editing by Alan Barona)
