As a typical representative of the third-generation semiconductor materials, silicon carbide (SiC) has superior physical and chemical properties compared to silicon (Si), which enables SiC devices to reduce energy consumption by more than 20%, and decrease volume and weight by 30% to 50%, meeting the preparation requirements for medium and low voltage, high voltage, and ultra-high voltage power devices. SiC devices can be widely applied in fields such as electric vehicles, rail transit, smart grids, communication radar, and aerospace.
SiC is mainly used in the manufacturing of power devices. Unlike the manufacturing process of traditional silicon power devices, SiC devices cannot be directly manufactured on SiC single crystal materials; high-quality epitaxial materials must be additionally grown on conductive single crystal substrates, and devices are manufactured on the epitaxial layer.
In the SiC industry chain, the key parts are mainly concentrated in the upstream. Among them, the substrate production cost accounts for 47% of the total cost, and the epitaxial wafer cost accounts for 23%, together accounting for about 70% of the total cost of the SiC industry chain. The substrate manufacturing technology has high barriers to entry, the greatest value, and not only determines the method and related parameters of upstream raw material preparation but also the performance of downstream devices, making it the key to promoting large-scale industrialization of SiC.
In terms of SiC substrates, 6-inch products have been commercialized, and on this basis, international giants are promoting 8-inch products, but there is still some distance from full commercialization. The situation for SiC epitaxial wafers is similar; 6-inch products have been commercialized and are also in the stage of promoting 8-inch product commercialization.
SiC power devices are mainly used in new energy vehicles, charging piles, industrial scenes, and transportation fields, among which the application proportion of new energy vehicles is the highest, accounting for 41.5% of the market share. Due to SiC being an ideal material for making high-temperature, high-frequency, high-power, and high-voltage devices, and the technology has become mature, it has become the ideal choice for achieving the best performance of new energy vehicles. At present, SiC devices are mainly used in EV/HEV for power control units, inverters, DC/DC converters, and on-board chargers. In addition, photovoltaics + energy storage is also a major application field for SiC power devices, accounting for 23.1%.
Driven by automotive applications, especially the demand for EV main inverters, the SiC market is growing rapidly. According to TrendForce statistics, in 2023, the global SiC power device market size is about 3.04 billion US dollars.
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SiC Industry PatternGeographically, the Asia-Pacific region is the largest global market for SiC consumption. From the perspective of enterprises, companies in the United States, Europe, and Japan hold a leading position in the SiC industry.
The top five global SiC manufacturers hold about 70% of the market share (shipments), including STMicroelectronics (a French-Italian semiconductor company), Infineon, Wolfspeed, Rohm (a Japanese company), Onsemi (a US company), BYD, and Mitsubishi Electric.
The representative companies from the United States are Wolfspeed and Onsemi. Wolfspeed announced the construction of a new multi-billion-dollar factory in North Carolina, expected to be completed by 2030; it is also building the world's first 8-inch SiC wafer factory in New York, with a total investment of 5 billion US dollars. Wolfspeed is also actively strengthening cooperation with downstream partners, such as a 3 billion US dollar investment in a wafer factory in Saarland, Germany, in cooperation with automotive parts supplier ZF, and a partnership with Mercedes-Benz to supply SiC devices.
European manufacturers are enhancing their competitive advantages in this field by vertical integration and increasing production capacity. Infineon announced an investment of more than 2 billion euros to expand the production capacity of its SiC factory in Malaysia, which will be operational in the second half of 2024. STMicroelectronics is also significantly increasing wafer production capacity, with plans to increase SiC wafer production capacity to ten times that of 2017 by 2024.
Rohm, a Japanese company, will invest 50 billion yen to strengthen SiC production, and Fuji Electric of Japan is considering advancing the production start time for SiC products by one year from the original plan of 2025.
Recently, TrendForce released a research report. According to statistics, the global SiC power device market maintained strong growth momentum in 2023, with the top five SiC suppliers accounting for about 91.9% of the total market revenue. Among them, STMicroelectronics ranked first with a market share of 32.6%, Onsemi jumped from fourth place in 2022 to second place, with a market share of 23.6%, followed by Infineon (16.5%), Wolfspeed (11.1%), and Rohm (8%).
At present, the mainstream product of SiC substrates is 6-inch, and the industry is upgrading to 8-inch. Although the processing cost of 8-inch substrates has increased, it can improve chip output. The number of chips that can be produced by 8-inch SiC wafers is about 1.8 times that of 6-inch, and the transition to 8-inch is a feasible method to reduce the cost of SiC devices. At the same time, the increased thickness of 8-inch substrates helps to maintain the geometric shape during processing, reduce edge warping, reduce defect density, and improve yield.
Due to the significant reduction in unit comprehensive cost by using 8-inch substrates, major manufacturers are actively deploying 8-inch SiC wafers. The mass production time of 8-inch wafers from manufacturers such as Wolfspeed, Infineon, Bosch, and Onsemi is concentrated between the second half of 2024 and 2026. Among them: Wolfspeed's 8-inch products have been announced, with an expected utilization rate of more than 20% in the second quarter of 2024; Onsemi's Korean factory officially started operation in 2024, with an expected production capacity of 1.7 times that of the previous year, and a production plan of about 800,000 pieces in 2026; Infineon stated that the 8-inch SiC device mass production at the Regensburg factory will start this year, with an expected production capacity of about 800,000 pieces by 2027, ten times that of the beginning of 2023.
Since Asia, especially the East Asian region, is the world's largest consumer market for SiC devices, and SiC manufacturers in Japan and China also play an important role in the global industrial chain, the following will focus on introducing the production of SiC devices in this region.Advantages of Japan: Solid Accumulation of Semiconductor Process Technology
The Japanese semiconductor industry and related companies have a long-standing manufacturing process and technological accumulation, which gives them a unique advantage in developing third-generation semiconductor devices represented by SiC.
In Japan, there are many manufacturers on the SiC industry chain, such as ROHM, Mitsubishi Electric, Toshiba, Fuji Electric, Renesas, Central Glass, DISCO, etc., all of which have strong competitiveness globally.
ROHM is the largest SiC power device manufacturer in Japan and produces SiC wafers through its German subsidiary SiCrystal. ROHM occupies 10% of the global SiC power device market and 15%-20% of the SiC wafer market.
ROHM plans to invest 510 billion yen in the SiC industry by 2028, with the goal of increasing SiC wafer production capacity by 35 times compared to 2021 by 2030. It is reported that by 2025, ROHM's SiC production capacity will be increased by 6.5 times.
In June this year, ROHM's subsidiary SiCrystal announced that it will expand its factory across from the existing factory in the northeast of Nuremberg, Germany. According to the introduction, the new SiC wafer factory will provide an additional 6,000 square meters of production space and will be equipped with the most advanced technology to further optimize the production of SiC wafers. The new factory is expected to be completed in early 2026, and by 2027, SiCrystal's total production capacity will be about three times that of 2024.
In June 2023, ROHM signed a long-term supply contract for SiC power devices with the German auto parts giant Vitesco Technologies, with a transaction amount exceeding 130 billion yen from 2024 to 2030. In July 2023, ROHM announced the acquisition of the Miyazaki Prefecture Kunitomi Town factory of solar cell manufacturer Solar Frontier, planning to use the factory to expand the production capacity of SiC power devices, which will become ROHM's main production base in the future.
Another manufacturer, Mitsubishi Electric, announced that it will double the previously announced investment plan to about 260 billion yen by March 2026, mainly for the construction of a new wafer factory to increase the production capacity of SiC power devices.
In October 2023, Japanese auto parts giant Denso and Mitsubishi Electric announced that they will invest $500 million each to take a 12.5% stake in Silicon Carbide, the SiC business subsidiary of American Coherent (formerly II-VI), with a total of 25% equity held by the two Japanese companies. Silicon Carbide mainly engages in the manufacturing of SiC wafers and other products, which was spun off from Coherent in April 2023. Through this investment, Denso and Mitsubishi Electric can achieve long-term stable procurement of 6-inch and 8-inch SiC wafers, further enhancing the competitiveness of inverters used to control electric vehicle motors.In Japanese enterprises, there are still many companies involved in the production of SiC substrates and epitaxial wafers, such as Fujitsu Semiconductor, Hitachi, Kyocera, Shin-Etsu Handotai, Finet Semiconductor, Sanken Electric, Sanyo Electric Manufacturing, Seiko NPC, Showa Denko, Sumitomo Metal Mining, and others.
Based on Japan's long-term accumulation in the field of semiconductor materials and equipment, relevant enterprises have also transferred their technical and process advantages to SiC.
Recently, Central Nitric Glass in Japan has developed a technology to manufacture SiC substrates using a solution containing silicon and carbon (liquid phase method). Compared with the traditional technology of growing single crystals by sublimation of SiC at high temperatures (sublimation method), the liquid phase method has more advantages in increasing the size of the substrate and improving quality. This technology can reduce the manufacturing cost of the substrate by more than 10%, and the yield will also be greatly improved.
Due to the complexity of preparing SiC substrates by the liquid phase method, this technology has not been applied in actual production before. Central Nitric Glass has successfully mass-produced 6-inch SiC substrates by using computational chemistry to calculate the dynamics of the solution. On this basis, the company plans to extend the relevant technology to the production of 8-inch SiC substrates as early as 2030.
In order to let customers adopt SiC substrates made with new technology, Central Nitric Glass has started negotiations with large European and American semiconductor companies. Central Nitric Glass will start to provide samples to customers as early as the summer of 2024, and achieve commercialization in 2027-2028.
In terms of equipment, the Japanese wafer equipment manufacturer DISCO launched a new SiC wafer cutting equipment in December 2023, which can improve the cutting speed by 10 times, and the first batch of products has been delivered to customers.
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Chinese manufacturers put pressure on international giants
At present, China's SiC industry is in a stage of continuous acceleration. In 2023, China's SiC substrate material shipments reached 894,000 pieces (equivalent to 6-inch wafers), a 297.9% increase from 300,000 pieces in 2022, with sales revenue of 3.65 billion yuan, a year-on-year increase of 221.2%. However, overall, there is still a certain gap between Chinese companies and foreign manufacturers, especially in the revenue of SiC power devices. For example, Xinlian Integrated Circuits expects its SiC device revenue to increase to 1 billion yuan in 2024, but only STMicroelectronics alone achieved SiC revenue of $1.14 billion (about 8.28 billion yuan) in 2023.In the field of SiC substrates, manufacturers such as Tianke Heda, Shandong Tianyue, Shanxi Shuoke, Hebei Tongguang, Guangzhou Nansha, and Jing Sheng Electromechanical have achieved mass production (or small batch production). Among them, Tianke Heda's production capacity last year reached 160,000 6-inch SiC wafers, and this year it will start producing 8-inch products. Shandong Tianyue is expected to reach a production capacity of 300,000 6-inch wafers by 2026.
According to a report by Yole, in the global market share ranking of conductive SiC substrate materials in 2023, Tianke Heda surpassed the American company Coherent (16%) with an 18% market share, ranking second globally, but still below WolfSpeed's 33%. Shandong Tianyue ranks fourth with a 14% market share.
In terms of SiC epitaxial wafers, manufacturers such as Dongguan Tianyu, Han Tiancheng, Sanan Optoelectronics, Hebei Puxing, and China Electronics Compound have achieved mass production and shipment, with the production capacity of SiC epitaxial wafers reaching over 4 million pieces in 2023.
In the field of SiC devices, the revenue of SiC power devices and modules from companies such as Xilian Integration, Silan Microelectronics, Jita Semiconductor, Basic Semiconductor, Taike Tianrun, Wantai Technology, Yangjie Technology, and Dongwei Semiconductor continues to increase.
At present, Chinese domestic SiC substrate manufacturers have excellent mass production levels of 6-inch products and are jointly developing 8-inch SiC technology with European and American IDM giants. For example, Tianke Heda and Tianyue cooperate with Infineon, providing 6-inch SiC substrate materials to Infineon for wafer processing, and will jointly transition to 8-inch SiC wafer technology; Sanan Optoelectronics has reached a cooperation with STMicroelectronics to jointly build an 8-inch SiC wafer factory in Chongqing.
The huge demand of China's electric vehicle market provides enough growth space for the SiC supply chain and also puts a lot of pressure on international giants. Due to the significant expansion of production capacity by Chinese companies, the decline in the price of SiC substrates is much faster than the market expansion speed. Industry insiders say that the foundry price of 6-inch SiC wafers in China has dropped to $1,200 to $1,800 per piece, a significant decrease from the price of about $4,000 per piece two years ago.
In 2023, the global supply of SiC substrates was 1.7 million pieces, and Tianke Heda's production capacity is estimated to reach 160,000 6-inch wafers that year, and it will start producing 8-inch SiC wafers this year. Shandong Tianyue plans to reach a production capacity of 300,000 6-inch wafers by 2026.
At the beginning of 2023, the price of 6-inch SiC substrates was still around $1,000, but now it is only more than $500. However, industry insiders believe that the price competition in China has reached its limit, as if the price continues to decline, Chinese manufacturers will also make no profit.
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