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[News] Silicon Carbide Prices Drop by Nearly 30%
Industry reports indicate that since the beginning of this year, the price of mainstream 6-inch SiC substrates has been consistently declining, with a drop of nearly 30%.
As of mid-2024, industry insiders in China reveal that the price of 6-inch SiC substrates has fallen below USD 500, approaching the production cost of Chinese manufacturers. By the fourth quarter of this year, prices have further dropped to USD 450 or even USD 400, creating financial pressure for most manufacturers.
There are currently three main concerns regarding the changes in silicon carbide prices within the industry:
- In 2024, the global production capacity for SiC crystal growth and substrate materials will see a significant increase. Some industry insiders are concerned that this may lead to a short-term oversupply in the market.
- The growth of electric vehicles (EVs), the largest target application for SiC materials, has shown signs of slowing down over the past two years, raising doubts about the long-term sustainability of the EV market and whether there are new growth drivers to support continued breakthroughs in third-generation semiconductors.
- The price war that has erupted in the silicon carbide (SiC) market since the beginning of this year has impacted SiC pricing, making corporate transition and growth key considerations for the present.
This article will explore the concerns mentioned above by examining perspectives from various industry stakeholders and provide insights to address these issues.
SiC Industry Faces New Wave of Mergers
Regarding production capacity, incomplete statistics from DRAMeXchange show that in 2024, a total of 14 new 8-inch silicon carbide plants will be constructed globally (12 under construction, 2 about to start). In the short term, only Wolfspeed’s Mohawk Valley plant will be able to provide 8-inch SiC wafers, with other manufacturers expected to gradually supply 8-inch SiC wafers starting next year.
In China, over 50 SiC-related expansion projects were initiated in 2023, with a total investment exceeding 90 billion RMB. In 2024, more than 100 companies in China are expected to enter the SiC sector, and over 50 SiC projects are making significant progress.
Regarding the sustainability of capacity expansion, some industry insiders have expressed concerns. While investments in the silicon carbide industry are enormous and some suppliers are actively expanding, the key question is whether they can continue to operate under lower pricing conditions, as oversupply remains uncertain.
In this environment, the SiC substrate industry is expected to undergo a wave of mergers and acquisitions, further reshaping the SiC industry’s landscape.
AI Data Centers: A New Growth Driver for Third-Gen Semiconductors
Although the electric vehicle market appears to have weakened recently, many major SiC manufacturers and automakers have indicated that SiC-powered electric vehicle models continue to grow, and 8-inch silicon carbide may present new opportunities. As of now, 800V models account for about 8.7% of China’s new energy passenger car market, with 800V silicon carbide penetration rates increasing to 72%.
In discussions about new growth drivers for third-generation semiconductors, the global wave of artificial intelligence (AI) and the growing demand for computing power in data centers are seen as key factors in unlocking the potential of third-generation semiconductors.
Price Wars Signal Turning Point for SiC Commercial Applications
Regarding price competition, some industry insiders suggest that while price wars may pressure profit margins for some manufacturers, in the long term, this could drive the entire industry towards more efficient and cost-effective solutions. This would also help SiC technology penetrate further into electric vehicles, photovoltaics, and industrial sectors.
In China’s market, the rapid decline in prices is directly related to an increasing number of local manufacturers gaining electric vehicle certification and expanding their production capabilities. Industry experts predict that as 8-inch SiC production capacity gradually ramps up, the cost of individual SiC devices or unit current density will further decrease, potentially marking a turning point for large-scale commercial applications of SiC.
(Photo Credit: Wolfspeed)
