With China intensifying export controls, Japanese companies relying on crucial battery and semiconductor materials manufactured in China are contemplating alternative solutions. They are actively seeking materials sources to achieve supply diversification.

TrendForce’s insight:

1. Alternative Solution Cannot be Translated into Immediate Success

While countries like Japan and South Korea have swiftly initiated strategies to find alternative solutions, the majority are still in the evaluation, research, or testing stages, unable to provide immediate assistance.

Even if alternative graphite production sources outside of China, such as in North America or Australia, are identified, it is likely to increase manufacturing costs, thereby impacting the selling price or profit performance of electric vehicles.

2. Back to Negotiation with Chinese Manufacturers

The post-export control scenario may accentuate the cost advantage of Chinese battery manufacturers, influencing the effectiveness of various protective measures taken by Europe and the United States to counter Chinese electric vehicles.

Consequently, countries may ultimately realize that returning to the negotiation table with China is more practical than going through a prolonged process, aligning with China’s primary objective.

3. Material Edge Won’t Last Forever

The continuous export restrictions on critical materials by China may encourage countries to persist in developing alternative solutions. For instance, OEMs like Tesla, GM, and Stellantis are actively investing in research on rare-earth-free motors to reduce dependency on Chinese rare earths.

While currently constrained by battery material technology, graphite remains the highest-value anode material. Yet, numerous companies are also exploring anodes with higher energy density, such as silicon oxide (SiO) and lithium metal (Li Metal).

Therefore, China must recognize that material advantages may not be permanent, and the core lies in the ability for technological iteration.

Read more

• [News] Japanese Companies Seek Battery and Chip Materials Outside China

(Photo credit: Pixabay)

STMicroelectronics, following its EUR 7.5 billion wafer fab project with GlobalFoundries in Crolles, France. is set to invest EUR 5 billion in building a new SiC super semiconductor wafer fab in Catania, Sicily, Italy. The fab in Italy will specialize in producing SiC chips, a pivotal technology for electric vehicles with substantial growth potential, according to French media L’Usine Nouvelle on November 26th,

STMicroelectronics competitively plans to transition to 8-inch wafers starting from 2024. The company will integrate Soitec’s SmartSiC technology to enhance efficiency and reduce carbon emissions. Simultaneously, STMicroelectronics aims to increase capacity, achieve internal manufacturing, and collaborate with Chinese firm Sanan Optoelectronics to raise SiC chip-related revenue from the expected USD 1.2 billion in 2023 to USD 5 billion by 2030.

On June 7th earlier this year, STMicroelectronics and Sanan Optoelectronics announced a joint venture to establish a new 8-inch SiC device fab in Chongqing, China, with an anticipated total investment of USD 3.2 billion.

To ensure the successful implementation of this extensive investment plan, Sanan Optoelectronics said to utilize its self-developed SiC substrate process to construct and operate a new 8-inch SiC substrate fab independently.

TrendForce: over 90% SiC market share by major global players        

According to TrendForce, the SiC industry is currently dominated by 6-inch substrates, holding up to 80% market share, while 8-inch substrates only account for 1%. Transitioning to larger 8-inch substrates is a key strategy for further reducing SiC device costs.

8-inch SiC substrates offer significant cost advantages than 6-inch substrates. The industry’s major players in China, including SEMISiC, Jingsheng Mechanical & Electrical Co., Ltd. (JSG), Summit Crystal, Synlight Semiconductor, KY Semiconductor, and IV-SemiteC, are advancing the development of 8-inch SiC substrates. This shift from the approximately 45% of total production costs associated with substrates is expected to facilitate the broader adoption of SiC devices and create a positive cycle for major companies.

Not only Chinese companies but also international semiconductor giants like Infineon Technologies and Onsemi are actively vying for a share of the market. Infineon has already prepared the first batch of 8-inch wafer samples in its fab and plans to convert them into electronic samples soon, with mass production applications scheduled before 2030. International device companies like Onsemi and ROHM have also outlined development plans for 8-inch SiC wafers.

Currently, major companies hold over 90% of the market share, intensifying competition. A slowdown in progress could provide opportunities for followers. According to TrendForce, the market share of the top 5 SiC power semiconductor players in 2022 was dominated by STMicroelectronics (36.5%), Infineon (17.9%), Wolfspeed (16.3%), Onsemi (11.6%), and ROHM (8.1%), leaving the remaining companies with only 9.6%.

(Image: STMicroelectronics)

Explore More

• [News] China Jingsheng Launches 2.1 Billion CNY SiC Substrate Project Marks Significant Investment
• [News] ROHM’s First SiC Substrate Production in Japan, 8-Inch Substrates Set for 2024
• [In-Depth Analyses] China Advances to 8-Inch SiC Substrates in 2023
• [News] GlobalWafers Plans 8-Inch SiC Production Next Year and Growth for 2025

According to the Economic Daily News’ report, industry sources indicate that Samsung, a major supplier of CIS, has issued a price increase notice to customers on November 29th, projecting an average price increase of up to 25% in the first quarter of next year.

The individual product lines may see an even higher increase, reaching levels of up to 30%, primarily in specifications with 32 million pixels and above. This suggests that the CIS market is poised for a new cycle of price increases.

Previously, the CIS market was impacted by subdued demand in the consumer market, leading to a decline in market prices and making CIS one of the first component to experience price declines. However, entering the latter half of this year, the demand for smart devices, particularly in the smartphone market, has started to recover comprehensively.

This is driven by strong procurement efforts from Chinese smartphone brands, significantly boosting inventory demand and becoming the catalyst for the rapid clearance of CIS inventory.

(Photo credit: Samsung)

Source to TrendForce, the most recent update on solar materials pricing indicates an ongoing decline in Polysilicon and Module prices, while Wafer and Cell prices are holding steady for the time being.

• Polysilicon

Polysilicon prices continue to decline throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 64/KG, while mono dense polysilicon is priced at RMB 62/KG and N-type polysilicon is currently priced at RMB 66/KG.

Looking at the market transaction dynamics, there’s not a significant volume of orders being placed. Some companies are gearing up for December’s order negotiations. Observing the price trend, polysilicon manufacturers are adjusting prices for both new and existing orders. Even some previously high-priced orders have experienced declines.

Furthermore, the average price of N-type polysilicon in new orders is generally below the 70000 yuan/ton mark. On the supply side, numerous projects are now in production, leading to a constant increase in the marginal increment of polysilicon and further swelling polysilicon inventory. Consequently, polysilicon manufacturers are grappling with increased pressure to de-stock.

Despite a month-on-month rise in operation rates for professional wafer manufacturers, creating additional demand for polysilicon, the surplus supply remains challenging to address.

This week, polysilicon prices continue their downward trajectory, and there’s a significant oversupply of polysilicon. Moreover, with customer installation demand still not turning positive, crystal pulling manufacturers are adopting a pessimistic stance toward future polysilicon prices, displaying a cautious approach to purchasing polysilicon.

On the flip side, polysilicon manufacturers are determined to maintain current prices and show no signs of reducing prices to clear inventory. In conclusion, a tug-of-war in pricing dynamics is evident between buyers and sellers.

• Wafer

The prices of wafer have maintained stable throughout the week. The mainstream concluded price for M10 P-type wafer is RMB 2.30/Pc, while G12 P-type wafer is priced at RMB 3.30/Pc and M10 N-type is priced at RMB2.40/Pc.

On the supply side, wafer inventory has returned to the reasonable range, sitting at approximately 1.3-1.5 billion pieces. Analyzing various wafer types, the inventory of 210mm P-type wafers has seen a notable decrease, with the consumption rate slowing due to weakened demand.

With the alleviation of inventory pressure, specialized wafer manufacturers are ramping up their operational rates, resulting in a slight month-on-month increase in wafer output. Turning to the demand side, cell manufacturers are indicating a reduction in the production of 182mm P-type cells, while there’s no change in output for other cell types.

Consequently, the purchasing demand for 182mm P-type wafers is expected to decrease. Although wafer prices are holding steady this week, considering the divergent operational rates among downstream cell manufacturers, a future divergence in prices between N-type and P-type wafers is anticipated.

Moreover, attention should be directed towards whether the demand and supply relationship can sustain stable prices after the higher wafer activation rates lead to an increase in wafer output during the same period.

• Cell

Cell prices have maintained stable this week. The mainstream concluded price for M10 cell is RMB 0.46/W, while G12 cell is priced at RMB 0.56/W. The price of M10 mono TOPCon cell is RMB 0.49/W.

On the supply side, cell inventory can currently sustain for about six to seven days, but the pressure on inventory is mounting as downstream demand gradually declines. We’re currently in the midst of the technology iteration phase for N-type and P-type cells.

The production capacity of 182mm P-type cells has significantly dropped, leading to a decline in its OEM fees to 1.0-1.2 yuan. Given the current cell price and the manufacturing cost, the production line for 182mm P-type cells is operating at a loss, while the 210mm P-type cells are still profitable, thanks to orders this month.

However, as order deliveries conclude, the tense supply and demand dynamics are expected to ease. On the demand side, downstream module prices continue to slide, prompting module manufacturers to push for a reduction in cell prices. Additionally, customer demand is sluggish, and buyers are adopting a more cautious approach to future purchases.

This week, cell prices remain relatively stable, but production of 182mm P-type cells has been significantly reduced due to sustained losses, leading to a simultaneous decline in demand and supply. Nevertheless, there is still support from order deliveries for 210mm P-type cells.

In conclusion, with module prices consistently decreasing, we anticipate that cell prices will face increasing pressure in the coming weeks.

• Module

Module prices have gone down throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 1.03/W, 210mm facial mono PERC module is priced at RMB 1.04/W, 182mm bifacial glass PERC module at RMB 1.04/W, and 210mm bifacial glass PERC module at RMB 1.05/W.

On the supply side, prices quoted by leading manufacturers to their dealers have plummeted to less than 1 yuan/W, and bidding prices for recent projects are hitting unprecedented lows. The competition among module manufacturers has reached a fever pitch, driving prices in the sector to their rock bottom.

As the N-type and P-type technology undergo iteration, production capacity is slated to be officially cleared at its current low price. Shifting to the demand side, October saw a month-on-month decrease in new PV installations, indicating a clear decline in installation demand, according to statistics from the NEA.

Although distributed PV installed capacity remains robust, it cannot sustain a significant increase, and centralized ground installations are entering their off-season. Additionally, there’s no indication of a rebound in overseas demand, making it challenging for customer demand for module purchases to turn positive.

As the year draws to a close and earinings reports will be reported, manufacturers are grappling with the pressure to meet annual goals, intensifying the need to clear inventory. However, they find themselves in a precarious position in negotiations with customers, compelling them to further reduce prices to facilitate more shipments.

In summary, module prices are experiencing a decline this week and are anticipated to further decrease in the near future.

Following the Singles’ Day Sale in China, demands are relatively cooled down. While for DRAM spot prices, market experiences fluctuations due to subdued demand and increased supply of used chips. In contrast, NAND spot price remains relatively strong under the ongoing reduction in supply.

DRAM Spot Market

Following the Singles’ Day promotional events in China, demand has cooled down compared with the previous few weeks. Looking at DRAM spot prices, prices for chips from suppliers have remained steady, but there has been an influx of used chips stripped from decommissioned modules. Spot prices of used DDR4 chips have now fallen to US$1.05, significantly lower than the spot price of around US$1.75 for new chips from suppliers. Spot prices of DDR5 chips, on the other hand, have remained relatively stable. However, Kingston has not raised module prices, making it difficult to sustain the upward momentum. The average spot price of mainstream chips (DDR4 1Gx8 2666MT/s) rose by 1.54% from US$1.683 last week to US$1.709 this week.

NAND Flash Spot Market

Demand from the spot market has become even more enervated after China’s Double 11 shopping festival when compared to that of several weeks ago. In terms of spot prices, the mainstream 512Gb wafer is supported by suppliers’ ongoing diminishment of wafer provision, and continues to march towards US$2.7-US$2.9 at a relatively robust tendency in comparison with DRAM spots, despite poor demand. 512Gb TLC wafer spots have risen by 11.54% this week, arriving at US$2.862.