[News] Oversupply of 6-Inch SiC Substrate Leading to Price Decline

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According to a report from Commercial Times, the increase in production capacity has resulted in an oversupply of 6-inch SiC substrates, leading to a decline in prices.

The report indicated that by mid-2024, each piece was priced at less than USD 500 (approximately the manufacturing cost in China). By the fourth quarter, prices have fallen to as low as USD 400, or even lower.

According to the report, industry insiders indicate that the price collapse has forced most businesses to sell at a loss. However, despite the low prices, buyers remain hesitant to make purchases, as they anticipate that prices will continue to decline.

As for 8-inch SiC substrates, the report noted that though mass production has not yet been achieved, prices have rapidly declined in 2024, particularly in China.

According to the report, there is currently no standard price for 8-inch SiC substrates, as they remain in the trial production stage with very limited supply. However, prices have begun to decline.

At the end of 2023, the average quotation of 8-inch SiC substrates in China was approximately USD 3,000 to USD 4,000 per piece. By the second quarter of 2024, the price had dropped to just USD 2,000, representing a downward revision of around 50% within just six months.

The report indicated that currently the market quotation for 8-inch SiC substrates has plummeted to around USD 1,500. The decline in the first three quarters of 2024 has exceeded 60%, and it is estimated that by the first quarter of 2025, the price will drop to just USD 1,000.

Regarding the progress of mass production for 8-inch SiC, Wolfspeed remains dominant, currently operating at a capacity utilization rate of 25%. The report noted that Wolfspeed’s stock price has declined by more than 60% since the beginning of the year, primarily due to disappointing financial results linked to a slowdown in demand for electric vehicles.

According to its press release, Wolfspeed is set to receive USD 750 million from the U.S. Department of Commerce’s CHIPS and Science Act funding. Additionally, the company has secured another USD 750 million in financing from Apollo Global Management, The Baupost Group, Fidelity Management & Research Company, and the Capital Group.

The report noted that SiC pricing is currently chaotic. While the decline in upstream materials should benefit downstream applications, buyers expect prices to continue falling, which makes them hesitant to make purchases. This, in turn, contributes to an even more rapid decline in prices.

According to the report, the SiC market continues to rely on major IDM factories. The decline in raw material prices and component costs is expected to benefit terminal applications, which will not be limited to electric vehicles or solar modules.

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(Photo credit: Wolfspeed)