Since the 1980s, Toyota collaborated with Denso to conduct research on SiC. In 2014, SiC inverters were installed in Toyota’s Prius and Camry hybrid electric vehicles (HEVs) for driving and on-road testing, confirming a 5-10% improvement in energy efficiency. After this successful testing, Toyota adopted SiC in its hydrogen fuel cell buses that were put into formal operation in 2015 and 2018. At that time, the cost of SiC chips was higher than it is now, so Toyota continued to primarily use Si-IGBT inverters in its hybrid vehicle models.

Model 3 SiC Inverter Sparks Toyota’s Concerns About Electrification

In 2017, the Model 3, equipped with SiC inverters, became the best-selling battery electric vehicle (BEV) on the market due to its high performance and long range. It also contributed to the surge of new BEV sales, which exceeded 1.2 million vehicles in 2018. Since then, many automakers have targeted SiC as the basis for next-generation BEV drivetrain systems, while Toyota continued to adhere to its hybrid electric vehicle (HEV) and hydrogen fuel cell vehicle (FCV) strategies. According to TrendForce, the total new sales of PHEVs and BEVs is estimated to reach approximately 10.63 million vehicles in 2022, while Toyota’s sales in this sub-market are only close to 100,000, accounting for about 1% of the market share, far behind BYD’s 19% and Tesla’s 15%.

In the current EV industry, BEVs and PHEVs have become the mainstream, while HEVs may gradually shrink in the future market. Pressures from the changing market have forced Toyota, which has not fully focused on BEVs and PHEVs in the past, to rethink its overall electrification strategy and accelerate the production capacity and technological layout of key components, such as SiC.

Toyota aims to sell 3.5 million electric vehicles by 2030, and has demonstrated its commitment to electrification through the establishment of a SiC wafer manufacturing technology research company. SiC chips have the potential to improve energy efficiency in electric vehicles, but their high cost is currently a challenge due to low SiC wafer yields in the manufacturing process. QureDA Research’s Dynamic AGE-ing technology could help improve wafer yields and lower chip costs. If successful, this technology, combined with Toyota’s market presence, could enhance the competitiveness of Toyota’s electric vehicles and give them a chance to compete for a leading position in the future electric vehicle market.

（Image credit: Toyota LinkedIn）

Under the panel manufacturers’ ongoing strategy to control their operation rates and the growing demand for TV panels in the Chinese domestic market, TV panel prices are expected to continue to rise in April. However, there is a noticeable trend of first and second-tier brand customers disengaging, with second-tier brand customers having weaker bargaining power and mostly accepting the price increases.

While first-tier brand customers still have some room for negotiation, the overall trend of TV panel prices for all sizes remains unchanged. The price increases for the entire month of April are expected to be 1 USD for 32 inches, 3 USD for 43 inches, 6 USD for 50 inches, 7 USD for 55 inches, 13 USD for 65 inches, and 10 USD for 75 inches.

Since March, monitor panel prices have stabilized after a gradual decline. While demand for commercial models remains weak, there are signs of increased demand for consumer models, particularly for high-end gaming specifications, which is expected to keep monitor panel prices stable for all sizes this month.

As for notebook panels, first-tier brand customers’ cautious outlook on demand for the next quarter due to slow inventory clearance continues to suppress panel manufacturers’ ideas of raising prices. Therefore, it is expected that the prices will remain stable for the entire month of April. The key to whether prices can be raised in the future still depends on whether demand begins to significantly increase.

As the struggle between China and the United States continues, in order to avoid upcoming geopolitical risks, not only have Taiwanese ODM manufacturers begun to shift some production locations, but market research firm TrendForce has also observed that American OEM companies have started to take action, discussing with partners how to reduce the proportion of Chinese supply chains and components.

TrendForce points out that, at present, American cloud service providers (CSPs) and OEM manufacturers have not yet been able to completely cut ties with Chinese-produced components. Among these, passive components and mechanical assemblies are more difficult to relocate due to factors such as cost and yield. However, other components (such as PCBs and power management control ICs) have plans to move out of China.

But where will these component manufacturers go if they want to move out of China? According to TrendForce’s analysis, PCB manufacturers are currently eyeing shifts to Thailand, Malaysia, Vietnam, and India; power management ICs and control ICs have already moved out of China and relocated to Taiwanese factories; mechanical assemblies and MLCC capacities still mainly come from China, with the former being requested to move but facing challenges due to cost and yield considerations.

TrendForce notes that the aforementioned production line and material shifts are primarily led by American CSPs. The overall server supply chain’s subsequent changes still need to be observed. For example, major players like Google, AWS, and Meta have not only moved most of their L6 production lines to Taiwan but also plan to establish bases in Southeast Asia after 2024 to handle cases within the United States, and reserve flexible production lines along the US-Mexico border, which will significantly increase utilization within this year.

The global new energy vehicle (NEV) industry has grown by leaps and bounds over the past two years, especially in Chinese markets where 6.46 million NEVs were sold in 2022 — an impressive 89.5% YoY growth. The penetration rate of NEVs jumped from 14.3% in 2021 to 25.6% in 2022.

The global automotive MCU industry has also grown hand in hand, largely in part due to the explosive growth of NEVs and their tight supply-demand relationship. In 2022, the global automotive MCU market generated US$8.286 billion in revenue — an 11.4% YoY growth. Looking ahead to 2023, the market is predicted to grow 4.35%, reaching a value estimation of US$8.646 billion as a result of continued market expansion and technological advancements in the NEV industry.

Automotive MCUs to undergo a technological and demand revolution

More advanced NEVs will demand higher processing power from MCUs, requiring them to bear heavier performance loads. Foundries such as NXP, Renesas, and Infineon are working to improve the performance of their automotive MCUs through a two-pronged approach: Upgrading the manufacturing process and testing out new forms of storage to prevent a performance bottleneck.

Demand for automotive MCUs will be significantly boosted in the short term as NEVs become more intelligent, functional, complex, and comfortable. In the long-term, the electrical architecture of NEVs plans to shift from a decentralized to a more centralized design, consolidating multiple functions into one domain controller. While this will increase performance loads for MCUs, it also means a fewer number will be needed.

Chinese automotive MCU market experiences boom as domestic production ramps up in the face of a global shortage

China’s automotive MCU market has rapidly expanded in the past three years due to two factors: First, a global shortage has provided Chinese manufacturers an opportunity to break into the market. Especially since China is the world’s largest producer of NEVs, which translates to a higher demand for MCUs than any other region. In the past year alone, 16 Chinese manufacturers have launched their own MCUs; while some are currently in the certification process, others have already entered production.

Second, in the midst of a domestic production boom, an increasing number of Chinese automakers have switched to using domestic MCUs. Domestic NEVs account for more than half of China’s market share, providing Chinese MCU manufacturers with more opportunities to cooperate with Chinese automakers. A number of Chinese automakers have even begun investing in domestic MCU manufacturers.

Over the past three years, the rapid expansion of China’s automotive MCU industry has helped them gain a competitive edge within the market. In the mid- to long-term, China’s MCU market will continue to grow thanks to ramped up domestic production and a thriving NEV market.

On October 7, 2022, the U.S. government imposed export regulations restricting China’s access to semiconductor technology. In particular, the sanctions pertained to manufacturing equipment required in the production of 16nm/14nm or more advanced logic chips (FinFet, GAAFET), 18nm or more advanced DRAM chips, and NAND Flash with 128 or more layers. It’s evident that the U.S. intends to restrict China’s semiconductor manufacturing to 1Xnm. Moving forward, 28nm processes are likely to be included in the next set of regulations as some equipment used in manufacturing 28nm nodes can also be utilized in more advanced processes.

TrendForce predicts that upcoming U.S. export regulations will further focus on 28nm processes. Not only can 28nm manufacturing equipment be used in more advanced processes, but tight restrictions have forced Chinese companies to focus their efforts on expanding their 28nm operations. 28nm processes can be used to produce a large variety of other products: SoCs, ASIC AI chips, FPGAs, DRAMs, NAND Flash, ISPs, DSPs, Wi-Fi chips, RF components, Driver ICs, MCUs, CISs, DAC/ADC chips, PMICs, and other core components in a wide range of applications. If the U.S. allows Chinese companies to accelerate the expansion of their 28nm processes, China’s importance in the supply chain for terminal products will continue to climb — ultimately setting back the U.S’s efforts to decouple itself from China.

China still unable to fully manufacture 28nm chips domestically as expansion exhibits signs of slowing down

China cannot fully rely on domestic production for their 28nm semiconductors. If the U.S. chooses to move forward with restricting China’s access to 28nm manufacturing equipment, expansion will surely grind to a halt. China currently possesses equipment that is able to clean, backgrind, etch, and sediment for 16nm/14nm or more advanced processes. However, this is not enough for China to achieve semiconductor autonomy. Semiconductor manufacturing is relatively complicated as it involves thousands of processes; Chinese factories are only involved in a few of the processes — the majority of which depend on American and Japanese factories. All in all, with China’s semiconductor industry largely focused on 28nm/40nm and more mature processes, it will be difficult for them to achieve semiconductor autonomy for processes more advanced than 28nm by 2028.