The third-generation semiconductors represented by silicon carbide have firmly occupied the hot spot of the industry in the past two years. After experiencing rapid development in the past few years, starting from the second half of 2024, we have noticed some new changes, involving market, capacity, technology, price and other fields.
First, the pace of international manufacturers has slowed down
Yole expects the global SiC market to grow from nearly $6 billion in 2025 to $10 billion in 2029, with a compound annual growth rate of about 36.7%. In terms of chip and device manufacturing, according to the 2023 corporate financial report, the overall market share of STMicroelectronics (ST), Infineon, Wolfspeed, Onsemi, and ROHM will reach 82%, and the industrial sector is highly concentrated.
Thanks to the rapid development of the new energy vehicle industry, these large manufacturers have previously set performance targets to achieve a market share of 30-40% of SiC power electronics by 2030, and they are also quite aggressive in terms of capacity planning and investment. But in the second half of the year, the unstable market environment made them slow down temporarily.
Wolfspeed
Wolfspeed today announced that its Board of Directors has approved the resignation of Gregg Lowe as President and Chief Executive Officer and a member of the Board of Directors. The decision comes against the backdrop of the company’s slowdown in demand for electric vehicles, reduced orders in industrial, energy end markets, and a loss of $282 million in the first quarter of fiscal 2025.
Although Wolfspeed could receive a $2.4 billion injection under the UK’s CHIPS Act, the company is still struggling to transition to pure 200mm silicon carbide wafer and equipment manufacturing.
Earlier this month, Wolfspeed said it would prepare $174 million for restructuring charges for the planned closure of a 150mm SiC plant in Durham, North Carolina. The company also announced in its latest earnings call that it would lay off 20% of its workforce, or about 1,000 people, and abandon plans to build a factory in Ensdorf, Germany, in response to the slowdown in demand for electric vehicles in Europe.
Infineon
According to foreign media reports, due to the downturn in the semiconductor market, Infineon decided to postpone the second phase of the construction of the Kulim wafer factory in Malaysia and cut the investment by 10%. However, there was no official response from Infineon, and there is widespread speculation that if true, it indicates that the current market environment is still not optimistic, as the CEO of Infineon pointed out, “The cyclical weakness of the market continues, and the recovery in many end markets is weak.” ”
With an investment of up to EUR 5 billion, the second phase of Infineon’s “Super Fab” in Kulim, Malaysia, was originally planned to continue to expand over the next few years and will become the world’s largest and most competitive 200mm SiC power semiconductor fab.
According to Infineon’s financial report for fiscal year 2024, the company’s total annual revenue was 14.955 billion euros, down 8% year-on-year; The profit was 3,105 million euros and a margin of 20.8 percent, indicating that the company has maintained a certain level of profitability in the face of weak market demand.
Roma
ROHM’s SiC business progress and future plans have also been adjusted recently. According to the original plan, ROHM was ready to invest 510 billion yen (about 23.97 billion yuan) in the SiC business from 2021 to 2027, but now it is ready to reduce it to 470 billion to 480 billion yen (about 22.09 billion to 22.56 billion yuan), and the sales target of 110 billion yen (about 5.17 billion yuan) in fiscal 2025 has also been postponed to 2026-2027.
In terms of production capacity, Rohm Chikugo Plant is scheduled to start large-scale production in 2025, Miyazaki Plant 2 is scheduled to start operations in 2025, and the original goal of increasing SiC production capacity by 2025 to 6 times that of 2021 will be postponed to 2026.
Change 2: Local companies enter the game at a high speed
Although the domestic SiC market share is still relatively small compared with international manufacturers, China’s SiC device design and manufacturing technology is developing rapidly, and production capacity continues to expand. It is estimated that by 2026, China’s SiC production capacity and substrate production capacity will reach 4.6 million pieces, which can meet the SiC device demand of about 30 million new energy vehicles, and there is indeed a risk of overcapacity.
Tianyue Advanced Jinan and Jining factories have an annual production capacity of about 67,000 pieces, mainly 4~6 inch semi-insulating substrates; The Shanghai Lingang plant began delivering 6-inch conductive SiC substrates in May 2023, and the annual production capacity of conductive silicon carbide substrates will exceed 300,000 pieces when fully produced in 2026. In the second half of 2023, the company decided to expand the production scale of 6-inch SiC substrates to 960,000 pieces per year.
The second phase of Tianke Heda’s Beijing factory is under planning; The second phase of the Xuzhou factory has a total investment of 830 million yuan, with a planned annual output of 160,000 silicon carbide substrate wafers, which will be put into operation in 2024. It is estimated that by the end of 2025, the effective annual production capacity of Tianke Heda 6-inch substrate will reach 550,000 pieces.
The second phase of the Shuoke Crystal SiC project is expected to add 200,000 pieces of 6~8-inch SiC substrate production capacity to the company every year, and is expected to achieve an annual output of 300,000 pieces in 2025. According to the long-term plan, the company will continue to invest 3 billion yuan to form an annual production capacity of nearly 2 million pieces.
Tony’s “annual output of 120,000 pieces of SiC semiconductor materials” project will be completed in the first half of 2023, and plans to use the Tony’s Phase V plant to implement an expansion project with an annual output of 200,000 pieces of 6-inch SiC substrate materials.
After the second phase of the project of San’an Optoelectronics reaches production in 2025, the production capacity of 6-inch SiC substrates and supporting facilities will reach 360,000 pieces. It is expected that from the end of 2023 to the beginning of 2024, the 6-inch SiC production capacity is planned to be expanded to 18~20,000 pieces/month. In terms of the 8-inch production line, in addition to the joint venture with ST, in addition to investing 3.2 billion US dollars (about 22 billion yuan) in Chongqing to build an 8-inch SiC epitaxy and chip foundry, it will also invest 7 billion yuan to build an 8-inch SiC substrate factory in Chongqing.
The 8-inch SiC project of Silan Micro has entered the final stage of earthworks, and is expected to be preliminarily put into operation in the third quarter of 2025 and trial production in the fourth quarter. The total investment scale is about 12 billion yuan, and after the completion of the two phases of construction, an annual production capacity of 720,000 pieces of 8-inch silicon carbide power device chips will be formed.
The above is just a microcosm of the enthusiasm for investment and expansion in China’s SiC industry, according to incomplete statistics, there will be 121 SiC-related expansion projects publicly disclosed worldwide in 2023, with a total investment of up to 26 billion US dollars. Among them, 97 expansion projects came from China.
Change three, materials, devices, processes, three-dimensional technology
From the perspective of materials, based on the needs of cost and yield, wafer materials are developing in the direction of large-size, low-defect SiC substrates and epitaxial preparation. This mainly refers to the transformation and upgrading of silicon carbide wafers from 6 inches to 8 inches.
From the perspective of devices, the pursuit of lower SiC MOSFET ratio on-resistance, while at the same time in reliability and robustness closer to the level of silicon-based IGBT. At present, the leading international manufacturers basically maintain an iteration cycle of 3-5 years, and each iteration will bring a 20%-25% decrease in the specific on-resistance value. The latest technology of China’s SiC MOSFET has been benchmarked against the international mainstream level, and has maintained a rapid iteration rhythm of one generation in one year.
From the perspective of technology, we will continue to study the basic scientific issues that restrict the development of SiC MOSFETs, such as improving channel mobility by using high-purity SiC substrates and improving the gate oxide fabrication process.
Fourth, the price continues to fall
Entering 2024, the mainstream market price of 6-inch silicon carbide wafer substrates has rapidly dropped from a high level to the range of $400~450, which is a significant decrease from before. According to the analysis of industry analysts, the collapse of 6-inch silicon carbide prices is mainly due to oversupply and intensified market competition, and with the expansion of China’s silicon carbide production capacity, a large number of products have poured into the market, resulting in an imbalance between supply and demand, and prices have fallen under pressure.
In the Chinese market, the price of 6-inch silicon carbide substrates has fallen even more significantly. Compared with the quotation of international suppliers to maintain between 750~800 US dollars, the price difference between Chinese manufacturers and international suppliers has widened to about 30%, reflecting the fierce competition and oversupply of China’s silicon carbide market.
In terms of device prices, from September last year to April this year, the average price of 1200V/40mΩ SiC MOSFETs has fallen from 35 yuan to 23 yuan, a decrease of 35%. Compared with the price of the same type of 1200V/40mΩ silicon-based IGBT, the current price of SiC devices is 1.5-2 times that of silicon-based devices. Industry insiders predict that in the next two to three years, the price comparison value of SiC devices and IGBT devices of the same specification is expected to drop to 1.2-1.5 times.
Industry experts say that the price of silicon carbide substrates and epitaxy continues to decline, and this trend is likely to continue in the short term. With the successive commissioning of new layout capacity, the price war may further intensify, resulting in a further decline in prices.
Fifth, the application and industrial chain show dynamic development
A clear trend is that as automakers pursue higher energy efficiency and range, OEMs will release more models equipped with 800V platforms in the next two to three years, and the demand for SiC power devices will further increase. It can be said that “800V+SiC” has basically become the standard configuration of high-end electric vehicles.
Charging infrastructure is also developing at a rapid pace with the new energy vehicle market, especially in the Chinese market, where the ratio of new energy vehicles to charging piles has reached 2.5:1, much higher than the 8:1 ratio in Europe and the United States. According to the China Charging Alliance, China’s third-generation power electronics market for charging infrastructure is expected to reach 2.18 billion yuan by 2027. Among them, high-voltage DC fast charging creates the largest market opportunity for SiC power electronics.
Industry insiders pointed out that after the completion of SiC semiconductor technology innovation and market education, the focus of international competition will gradually shift from technology research and development to large-scale mass production, and relying on the huge application market and efficient production capacity improvement, China is likely to dominate the global SiC industry in the near future – the first stage is that international chip suppliers dominate the supply chain, and domestic SiC materials are partially replaced; The second stage is to achieve comprehensive domestic substitution in the domestic market, and international chips will carry out comprehensive cooperation with terminal enterprises and domestic enterprises.
