Vitesco, Rohm sign $1 billion silicon carbide microchip deal

German powertrain supplier Vitesco Technologies said Monday it signed an agreement with Japanese microchip maker Rohm Co., securing more than $1 billion in silicon carbide semiconductors through 2030.

The microchips will be integrated into inverters for electric vehicle powertrains starting as early as 2024, Vitesco said in a news release. The company said it had two customers for the inverters but did not name them.

The agreement comes as automakers and suppliers race to lock in long-term sources of semiconductors, especially as EV adoption ramps up and vehicles become more software-driven. The microchip shortage, which has significantly reduced vehicle output over the past few years, has also driven home the need for auto companies to actively secure semiconductor supplies.

“The supply partnership agreement with Rohm is an important building block for securing Vitesco Technologies’ [silicon carbide] capacities in the years ahead,” Vitesco CEO Andreas Wolf said in a statement.

Vitesco is the latest supplier to invest in silicon carbide semiconductors, which are more efficient than typical silicon chips, for use in EV products. Robert Bosch said in April it will buy a California chip maker and invest $1.5 billion to help meet growing demand for silicon carbide chips.

Vitesco spun off from Continental AG in 2021 and ranks No. 26 on the Automotive News’ list of the top global suppliers, with worldwide sales to automakers of $9.5 billion in 2021.