Despite concerns rippling through the semiconductor industry regarding Wolfspeed's potential bankruptcy, Renesas Electronics, a key player in India's burgeoning OSAT (Outsourced Semiconductor Assembly and Test) landscape, has conveyed assurance that the situation will not significantly impact their Indian operations.

Reports have surfaced highlighting the financial struggles of US-based silicon carbide (SiC) wafer maker Wolfspeed, sparking worries about potential disruptions in the global semiconductor supply chain. These concerns particularly extend to CG Power and Industrial Solutions, an Indian company with an upcoming OSAT facility in Sanand, given Renesas' involvement as a partner in this venture.

CG Power holds a 92.3% stake in the Sanand-based OSAT joint venture, with Renesas owning a 6.8% share. The Rs 7,600-crore plant is slated to commence mass production in 2027, with Renesas providing the technological know-how for the assembly and packaging facility. The facility aims to manufacture a wide range of products, from legacy packages like QFN and QFP to advanced packages such as FC BGA and FC CSP, catering to industries like automotive, consumer, industrial, and 5G.

The core of the concern stems from Renesas' long-term SiC wafer supply agreement with Wolfspeed, valued at $2 billion. Should Wolfspeed face bankruptcy, Renesas could incur substantial losses and a disrupted supply chain. This is because Renesas planned to utilize Wolfspeed's SiC wafers for mass production of SiC power semiconductors at its Takasaki factory, starting in 2025. A decision in 2024 to delay initial procurement from Wolfspeed offered some mitigation, but the long-term stability of Renesas' wafer supply remained a concern.

However, Renesas has been proactive in diversifying its supply chains. This move aims to reduce reliance on Wolfspeed and insulate CG Power from external shocks. In addition to supply chain diversification, Renesas may look to secure demand guarantees by striking agreements with other semiconductor giants.

Renesas remains committed to strengthening the product engineering capabilities of local startups by providing development boards and Altium Designer software. Moreover, Renesas intends to support experiential learning in academic institutions by offering development boards, PCB education and training, Altium Designer software, and access to the Altium 365 cloud platform, with the aim of empowering the next generation of electronics engineers and nurturing a community of innovators.

While the industry watches the Wolfspeed situation closely, Renesas' current stance suggests a contained impact on its Indian OSAT venture. The company is focusing on its long-term strategy for growth in India, aiming for over 10% of its global revenue to originate from the Indian market by 2030.