Saxonburg-based II-VI Inc. announced the close of a $100 million contract to supply China-based Dongguan Tianyu Semiconductor Technology Co. with silicon carbide substrates, a substance used for the manufacturing of semiconductor computer chips.
Tianyu is one of China's largest silicon carbide epitaxial wafer manufacturers, the products of which go on to be used in the powering of various electronic devices.
II-VI's (NASDAQ: IIVI) contract will see the Pittsburgh company begin delivery of its silicon carbide substrate product to Tianyu starting this quarter and it will continue providing them for the company until the end of calendar year 2023.
The deal has been months in the making.
“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,” Sohail Khan, executive vice president of new ventures & wide-bandgap electronics at II-VI, said in a press release. “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.”
In anticipation of this demand from Tianyu and in hopes of supplying other manufacturers in the region, II-VI built 50,000 square feet of cleanroom space at the company's Asian headquarters in Fuzhou, China. The company operates in at least 3.2 million square feet of space in China, which is also where more than half of its 22,000 employee workforce is based.