By Will Feuer

Coherent's silicon carbide business, which makes wafers used for electric vehicles and other sectors, will get $1 billion in investments from two Japanese automakers, a deal that values the unit at some $4 billion.

Denso Corp. and Mitsubishi Electric will both invest $500 million each for 12.5% stakes in the unit. Coherent said it will own the remaining 75% and continue to operate the business as an independent subsidiary.

As part of the deal, Coherent also agreed to long-term supply arrangements with Denso and Mitsubishi.

The investment ends Coherent's strategic review, which the Saxonburg, Pa., company started earlier this year. Coherent said the investment also will enable it to invest more into the silicon carbide business, including in manufacturing capacity.

Many EV makers have been working to secure supply of silicon carbide wafers, which help to hasten the charging time and extend the range of EVs more than traditional silicon chips.

Write to Will Feuer at Will.Feuer@wsj.com

(END) Dow Jones Newswires

October 10, 2023 07:05 ET (11:05 GMT)

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