Recently, rumors surfaced that price drops in the silicon carbide (SiC) wafer market. So, what is the actual market situation for SiC wafer?

Currently, most companies in the supply chain agree on the fact that the price of SiC wafer is on the decline. For instance, Xu Xiulan, the chairwoman of GlobalWafers, publicly stated that the global release of 6-inch SiC wafer production capacity, coupled with a temporary slowdown in demand for electric vehicles, is putting downward pressure on SiC wafer prices in 2024. On May 9, 2024, SICC highlighted two internal reasons for the price drop in an investor relations report: technological advancements and scale effect, which brought down wafer costs.

Indeed, changes in technology and production capacity of SiC wafer have become increasingly evident since 2H23.

Technically, more than ten China-base companies have entered the sample delivery and small-batch production stages for 8-inch SiC wafer in addition to international ones, including SemiSiC, JSG, SICC, GZSC, Synlight Crystal, Tankeblue, KY Semiconductor, Hunan San’an Semiconductor, Hypersics, Taisic Materials, Heligenius, Cengol Semi,and GlobalWafers.

Regarding scale effect, while SiC wafer manufacturers’ early invested projects are now reaching the investment return phase, not a few wafer companies have been shifting their production focus to 8-inch wafer.

For example, JSG’s project for an annual production of 250,000 6-inch and 50,000 8-inch SiC wafers officially signed and started in November 2023; Cengol’s 8-inch SiC processing line got ready and went into small-batch production in February 2024; GZSC’s 8-inch SiC single crystal and wafer project was established in Jinan, Shandong, in June 2023, with full production expected by 2025; KY Semiconductor signed a strategic cooperation agreement with Russian company N in March 2024 to work on the “8-inch SiC Perfect Seed Crystal” project.

The decline in SiC wafer prices is an inevitable trend, towards which most companies hold a positive attitude. As CGEE stated, the expansion of market space and improvement in yield levels will unavoidably cause price adjustments during the competition, which will place stress on related companies in the short term.

However, for the entire supply chain, the advantages from the improvement in yield and decrease in prices outbalance disadvantages. That means cost reduction will invigorate more downstream applications, and thereby enable the industry to maintain a sound growth rate as a whole.

As a part of SiC wafer market, SICC also pointed out that currently, the price of SiC wafer is much higher than that of Si wafer. As such, the decrease in SiC wafer prices will help expand downstream applications and promote the penetration and adoption of SiC technology and materials, fostering overall growth.

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(Photo credit: JSG)

As reported by the South Korean tech media outlet TheElec, South Korean smartphone giant Samsung is said to be planning to increase the production of phones manufactured by joint development manufacturers (JDM) in China from 4.4 million to 6.7 million units this year. The increased output from its JDM partners indicates that outsourced orders will account for 25% of Samsung’s smartphone production target for the year.

Reportedly, its JDM partners typically handles the production of low-end smartphones, being responsible for design and component procurement while Samsung provides the brand. For the past couple of years, the company has used JDM partners like Wintech to reduce its production cost for smartphones.

Furthermore, collaborating with JDM partners also enables Samsung to leverage the local manufacturers’ expertise in understanding trends. For instance, with the assistance of JDM partnerships, the Galaxy C55 was optimized locally for the Chinese market.

The number of Samsung smartphones produced by these JDM partners has also been steadily increasing in recent years. Data indicates that in 2019, JDM-produced phones accounted for less than 7% of Samsung’s smartphone output, but this year, that proportion has risen to 25%.

Regarding the current smartphone market in China, the China Academy of Information and Communications Technology (CAICT) has released its April 2024 analysis of the Chinese mobile phone market, showing a year-on-year increase of 28.8% in mobile phone shipments to 24.071 million units during the period.

According to the data from CAICT, in terms of brands, local brands dominated with 85.5% of the shipments, approximately 20.576 million units, while overseas brands, including Apple, accounted for nearly 3.5 million units.

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• [News] Continued Slump in iPhone Demand in China – February Shipments Reportedly Plunge by 33%

(Photo credit: Samsung)

Following its success in the LCD panel market, China’s BOE Technology Group plans to lead in the OLED panel sector as well. According to a report from Japanese media outlet Nikkei News on May 27th, BOE, China’s largest panel manufacturer, plans to boost its OLED panel production capacity by more than a half compared to the current level within the next three years.

As per the same report from Nikkei News, BOE has established a series of LCD plants with support from the Chinese government. In the OLED panel sector, BOE is also said to be eyeing on becoming the market leader by expanding production and catching up with South Korean companies like Samsung Electronics.

Reportedly, BOE’s new OLED panel plant “B16” in Chengdu, Sichuan Province, began construction in late March. The goal is to complete the plant building by 2024, install manufacturing equipment by September 2025, and start mass production in 2026, producing 8.6-generation OLED panels. BOE’s competitor, Samsung Electronics, is also said to be looking for mass production of 8.6-generation OLED panels in 2026 by upgrading its existing plants.

The same report further indicates that BOE is actively hiring talented professionals from Japan and South Korea and leveraging global suppliers. Thus, BOE’s OLED panel technology has reportedly gained recognition, successfully entering Apple’s iPhone OLED panel supply chain, serving as a catalyst for its growth.

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• Shipments of OLED Monitors Hit 200,000 Units in 1Q24, Annual Forecast to Reach 1.34 Million, Says TrendForce[News] NVIDIA’s H100 Chip Heat Declines, CoWoS Capacity Eases

(Photo credit: BOE)

TSMC’s Nanjing plant has averted an export permit expiration crisis. On May 23rd, TSMC confirmed that it has recently received the “Validated End-User” (VEU) authorization from the U.S. Department of Commerce for TSMC (Nanjing) Co., Ltd., according to a report by Commercial Times.

Currently, the same report noted that the Nanjing plant focuses on mature processes such as 16nm and 28nm, and will continue to expand to meet customer demand. With the official U.S. authorization, the plant will no longer require individual case reviews.

TSMC stated that this formal VEU authorization replaces the temporary written authorization issued by the Department of Commerce since October 2022. The VEU does not grant new privileges but confirms that the items and services covered under U.S. export control regulations can continue to be supplied to TSMC (Nanjing) Co., Ltd. without the need for individual licenses from suppliers.

The VEU authorization allows TSMC’s Nanjing plant to maintain its current production status. Industry sources cited by Commercial Times noted that, although TSMC received its indefinite exemption later than Samsung, it has not affected TSMC’s competitiveness in the local market. Offering more competitive specialized processes is the key to TSMC’s continued customer trust.

Industry sources cited in the same report further pointed out that more specialized processes help TSMC tackle geopolitical risk challenges. For example, in the panel driver IC sector, after beginning mass production of 28nm high-voltage products this year, TSMC is now developing a 16nm high-voltage FinFET process to enable customers to design more competitive OLED panel driver ICs.

Additionally, TSMC is reportedly collaborating with customers to validate its 16nm consumer-grade products and co-develop automotive-grade 16nm magnetic random-access memory (MRAM) technology. TSMC is also progressing towards higher storage density and lower cost solutions in preparation for the next generation of 16nm MRAM.

TSMC is also accelerating its deployment of future technology applications such as software-defined vehicles (SDVs), smart sensors, and edge AI, developing the most suitable products for various regional markets, spanning from China, United States, Japan, and Germany.

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• [News] TSMC’s Nanjing Plant Reportedly Pushes for Indefinite Exemption From US Before the May 31 Deadline
• [News] TSMC More Ambitious on CoWoS Capacity Expansion, Targeting 60% CAGR by 2026

(Photo credit: TSMC)

Due to escalating geopolitical risks, Tesla is reportedly requesting its suppliers to begin manufacturing components and parts outside of China and Taiwan as early as 2025.

According to a report from Nikkei News on May 23rd, citing sources from the supply chain, suppliers of printed circuit boards, panels, and electronic controllers for models sold outside of China have recently received requests from Tesla to avoid China and Taiwan. The reason cited is the increasing geopolitical risks in the Greater China region prior to the U.S. presidential election. The objective of this move is to create alternative supply sources for markets outside of China to avoid disruptions in the supply chain.

Reportedly, a Taiwan-based supplier of Tesla revealed that Tesla wants all components to be OOC, OOT, meaning ‘out of China’ and ‘out of Taiwan.’ Allegedly, they hope this proposal can be implemented in new projects next year. Tesla is said to have made this request before the US government increased tariffs on Chinese electric cars fourfold to 100%.

Nikkei News’ report also indicates that Tesla has discussed this issue with suppliers in Japan, South Korea, and other Asian countries. A component supplier source cited in the same report mentioned that his company has responded to Tesla’s request by expanding production in Thailand. The source claimed that for many customers like Tesla, the “China Plus One” strategy—which involves diversifying investments beyond China into other countries—also includes avoiding Taiwan.

The report further cited sources, indicating that American car manufacturers such as General Motors and Ford are also instructing their suppliers to explore on relocating their electronic production lines away from China and Taiwan. However, they have not formally made requests similar to Tesla’s.

Another source cited in the report remarked that Tesla is the most proactive among American automakers in wanting to avoid risks associated with China and Taiwan, but implementing the OOC and OOT strategy is indeed challenging and costly.

Tesla has previously placed orders with TSMC for numerous chips related to electric vehicles. For instance, the supercomputer chip “D1” is utilizing TSMC’s 7nm technology along with advanced packaging processes.

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(Photo credit: Tesla)