[News] A Price War in SiC Wafer Sector seems to Start

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Recently, rumors surfaced that price drops in the silicon carbide (SiC) wafer market. So, what is the actual market situation for SiC wafer?

Currently, most companies in the supply chain agree on the fact that the price of SiC wafer is on the decline. For instance, Xu Xiulan, the chairwoman of GlobalWafers, publicly stated that the global release of 6-inch SiC wafer production capacity, coupled with a temporary slowdown in demand for electric vehicles, is putting downward pressure on SiC wafer prices in 2024. On May 9, 2024, SICC highlighted two internal reasons for the price drop in an investor relations report: technological advancements and scale effect, which brought down wafer costs.

Indeed, changes in technology and production capacity of SiC wafer have become increasingly evident since 2H23.

Technically, more than ten China-base companies have entered the sample delivery and small-batch production stages for 8-inch SiC wafer in addition to international ones, including SemiSiC, JSG, SICC, GZSC, Synlight Crystal, Tankeblue, KY Semiconductor, Hunan San’an Semiconductor, Hypersics, Taisic Materials, Heligenius, Cengol Semi,and GlobalWafers.

Regarding scale effect, while SiC wafer manufacturers’ early invested projects are now reaching the investment return phase, not a few wafer companies have been shifting their production focus to 8-inch wafer.

For example, JSG’s project for an annual production of 250,000 6-inch and 50,000 8-inch SiC wafers officially signed and started in November 2023; Cengol’s 8-inch SiC processing line got ready and went into small-batch production in February 2024; GZSC’s 8-inch SiC single crystal and wafer project was established in Jinan, Shandong, in June 2023, with full production expected by 2025; KY Semiconductor signed a strategic cooperation agreement with Russian company N in March 2024 to work on the “8-inch SiC Perfect Seed Crystal” project.

The decline in SiC wafer prices is an inevitable trend, towards which most companies hold a positive attitude. As CGEE stated, the expansion of market space and improvement in yield levels will unavoidably cause price adjustments during the competition, which will place stress on related companies in the short term.

However, for the entire supply chain, the advantages from the improvement in yield and decrease in prices outbalance disadvantages. That means cost reduction will invigorate more downstream applications, and thereby enable the industry to maintain a sound growth rate as a whole.

As a part of SiC wafer market, SICC also pointed out that currently, the price of SiC wafer is much higher than that of Si wafer. As such, the decrease in SiC wafer prices will help expand downstream applications and promote the penetration and adoption of SiC technology and materials, fostering overall growth.

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(Photo credit: JSG)