“We believe that a secure supply of silicon carbide chips will be critical to our ability to continue delivering innovative and efficient eDrive systems for our customers,” Magna Powertrain President Diba Ilunga said in a statement.
In addition to signing the supply agreement, Magna committed to spend $40 million on new silicon carbide equipment for Onsemi at facilities in New Hampshire and the Czech Republic. The new equipment will help “ensure access to future supply,” the companies said in a news release.
Magna is the latest supplier to secure a silicon carbide chip supply in recent months. Silicon carbide chips are in high demand because they perform better for electric vehicle applications, but they are generally more expensive and more difficult to produce than a more typical silicon semiconductor.
Magna’s deal with Onsemi comes just nine days after BorgWarner expanded a previous agreement with the Scottsdale, Ariz., chip maker. That long-term deal, valued at more than $1 billion, will provide BorgWarner with Onsemi’s silicon carbide chips for the supplier’s Viper power modules.
In June, Vitesco Technologies signed a $1 billion agreement with Japanese microchip manufacturer Rohm Co. that will supply the German powertrain supplier with silicon carbide semiconductors through 2030.
Robert Bosch, meanwhile, said in April that it would purchase California microchip maker TSI Semiconductors and turn its Roseville, Calif., foundry into a source of silicon carbide microchips for EVs by 2026. Bosch, the world’s largest auto supplier, plans to spend $1.5 billion to update the Roseville facility.
Magna ranks No. 4 on the Automotive News list of the world’s largest suppliers, with annual parts sales to automakers of $37.8 billion in 2022.
