[News] China’s Low-Cost SiC and Mature Chips Ignite Global Semiconductor Price War

According to a report from ijiwei, citing Nikkei, China is rapidly expanding its production capacity in the mature semiconductor and niche substrate sectors, pushing prices to unprecedented lows and exerting significant pressure on the global chip industry.

The report, quoting a sales director at a German semiconductor equipment manufacturer, notes that two years ago, Wolfspeed’s mainstream 6-inch silicon carbide (SiC) wafers were priced at USD 1,500 per piece. However, Chinese suppliers are now offering them for as low as USD 500 per wafer, or even less.

Chinese suppliers are rapidly expanding their share of the global market. As noted by the report, this accelerated growth is driven by China’s intensified efforts to fortify its domestic supply chain, particularly in SiC and other compound semiconductors, as well as widely used mature-node chips.

Notably, China has been expanding its SiC wafer production, largely due to the availability of production equipment that mostly falls outside U.S. export controls, along with state-backed subsidies, the report indicates.

Amid intensifying competition from low-cost Chinese chips, Wolfspeed’s CEO, Gregg Lowe, stepped down at the end of 2024 following deteriorating financial performance. Meanwhile, other SiC wafer manufacturers, including Japan’s ROHM, have also reported consecutive quarterly net losses since mid-2024, the report adds.

Chinese Companies Expanding Mature Node Production

As Chinese companies aggressively expand their mature-process chip production capacity, the Nikkei report points out that overcapacity has become a growing concern. The issue is further exacerbated by the influx of Chinese electronics and automotive companies entering the chip manufacturing sector, the report notes.

TrendForce highlighted that as new capacity from China comes online, Chinese foundries’ share of mature process capacity among the top 10 is expected to exceed 25% by the end of 2025. The highest increases will be seen in 28/22 nm production. Chinese foundries are also advancing their specialty process technologies, with the HV platform in particular expected to lead, and 28 nm already in mass production as of 2024.

Read more

• [News] SMIC Likely to Continue Expanding Capacity Amid U.S.-China Tech Tensions
• Mature Process Capacity to Grow 6% in 2025; Chinese Foundries Lead Expansion, Says TrendForce

(Photo credit: SMIC)