In February 2023, it seemed like the start of a promising partnership. ZF CEO Holger Klein and Wolfspeed CEO Gregg Lowe visited Saarland, to meet with Chancellor Olaf Scholz and Minister of Economics Robert Habeck. Together they announced plans for a state-funding supported semiconductor factory, with the Americans investing 2.75 billion euros and ZF contributing 170 million euros.

The German-American friendship has not survived the honeymoon. Just a few months later, doubts had been raised that the project would be implemented according to the initially planned timeline. Meanwhile, it seemed that at least at ZF and Wolfspeed, they wanted to know nothing more about the project in Saarland. This was despite Wolfspeed CEO Lowe being quoted at the time saying he had visited many potential locations for a new plant in Europe – „and fell in love with Saarland.“

Lowe praised the Saarland state government for being „hungry for new technology“ in the region, and for enthusiastically supporting the establishment of the chip factory. An advantage of the small federal state was that there were sufficiently highly qualified workers available on site – especially at the important ZF location in Saarbrücken, which, due to the shift towards more e-mobility, is likely to need fewer employees there. Thus, it represented a win-win situation for Wolfspeed and ZF – one needed more highly qualified specialists at the site, while the other needed fewer.

Love has since cooled. There is no statement from Lowe himself regarding the current debate about the new factory construction. His company, Wolfspeed, merely announced last week that they remain committed to the Ensdorf location in Saarland for a new large chip factory. If demand for electric vehicles picks up significantly, they plan to expand in Europe.

For CEO Lowe, the new construction on the Saar is likely far down on his priority list, as he has enough other problems in his home market. Two new factories need to be put into operation first. Recently, losses have even temporarily exceeded the revenue of the Americans. One reason for the difficulties is the switch from the industry-standard 150-millimeter wafers to 200-millimeter ones. This is associated with high start-up costs but could pay off over time, analysts say.

On the stock market, Wolfspeed is not exactly considered a great hope. The stock price has already dropped by more than 60% in 2024, placing it alongside Intel, which has also pushed back a billion-dollar project in Germany, on the losers’ list.

The 62-year-old Lowe, who spent several years in Germany as a manager at Texas Instruments in the 1990s, has been at the helm of the company since 2017. Under his leadership, Wolfspeed claims to have invested over $8 billion in the „rapid expansion of the silicon carbide market.“

The manager is a veteran of the industry. Before taking office at Wolfspeed, he led Freescale Semiconductor and guided it through a merger with NXP Semiconductors N.V. Lowe also spent 28 years at Texas Instruments.