Although current semiconductor process technologies have evolved to the 3nm and 5nm nodes, SoC (system on a chip) architecture has yet to be manufactured at these nodes, as memory and RF front-end chiplets are yet to reach sufficient advancements in transistor gate length and data transmission performance. Fortunately, EDA companies are now attempting to leverage heterogeneous integration packaging technologies to link the upstream and downstream semiconductor supply chains as well as various IP cores. Thanks to this effort, advanced packaging technologies, including 2.5D/3D IC and SiP, will likely continue to push the limits of Moore’s Law.

While SoC development has encountered bottlenecks, EDA tools are the key to heterogeneous integration packaging

As semiconductor process technologies continue to evolve, the gate length of transistors have also progressed from μm (micrometer) nodes to nm (nanometer) nodes. However, the more advanced process technologies are not suited for manufacturing all semiconductor components, meaning the development of SoC architectures has been limited as a result. For instance, due to physical limitations, memory products such as DRAM and SRAM are mostly manufactured at the 16nm node at the moment. In addition, RF front-end chiplets, such as modems, PA (power amplifiers), and LNA (low noise amplifiers) are also primarily manufactured at the 16nm node or other μm nodes in consideration of their required stability with respect to signal reception/transmission.

On the whole, the aforementioned memory, and other semiconductor components cannot be easily manufactured with the same process technologies as those used for high-end processors (which are manufactured at the 5nm and 3nm nodes, among others). Hence, as the current crop of SoCs is not yet manufactured with advanced processes, EDA companies including Cadence, Synopsys, and Siemens (formerly Mentor) have released their own heterogeneous integration packaging technologies, such as 2.5D/3D IC and SiP (system in package), in order to address the demand for high-end AI, SoC architecture, HPC (high performance computing), and optical communication applications.

EDA companies drive forward heterogeneous integration packaging as core packaging architecture and integrate upstream/downstream supply chain

Although the current crop of high-end semiconductor process technologies is still incapable of integrating such components as memory, RF front-end, and processors through an SoC architecture, as EDA companies continue to adopt heterogeneous integration packaging technology, advanced packaging technologies, including 2.5D/3D IC and SiP, will likely extend the developmental limitations of Moore’s Law.

Information presented during Semicon Taiwan 2021 shows that EDA companies are basing their heterogeneous integration strategies mainly on the connection between upstream and downstream parts of the semiconductor supply chain, in addition to meeting their goals through chip packaging architectures. At the moment, significant breakthroughs in packaging technology design and architecture remain unfeasible through architectural improvements exclusively. Instead, companies must integrate their upstream chip design and power output with downstream substrate signal transmission and heat dissipation, as well as other factors such as system software and use case planning. Only by integrating the above factors and performing the necessary data analysis can EDA companies gradually evolve towards an optimal packaging architecture and in turn bridge the gap of SoC architectures.

With regards to automobiles (including ICE vehicles and EVs), their autonomous driving systems, electronic systems, and infotainment systems require numerous and diverse semiconductor key components that range from high-end computing chips to mid-range and entry-level MCUs. As such, automotive chip design companies must carefully evaluate their entire supply chain in designing automotive chip packages, from upstream manufacturers to downstream suppliers of substrates and system software, while also keeping a holistic perspective of various use cases. Only by taking these factors into account will chip design companies be able to respond the demands of the market with the appropriate package architectures．

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According to TrendForce’s estimates, the global automotive market will sell 88.6 million vehicles in 2022, growing 10.1% YoY. This estimate includes deferred demand due to automakers’ production cuts in 2021. However, numerous uncertainties still bedevil the overall automobile market in terms of production while supply chain issues and the COVID-19 pandemic are expected to continue impeding automobile sales. In addition to supply chain issues, global inflation caused by rising energy and upstream raw material costs has also become a hidden economic burden in various countries. When the overall cost of living increases, the automotive market will experience the ensuing negative impact.

NEVs expected to exceed 8 million units in 2022 as competition intensifies

The penetration of electric vehicles into the automotive market is accelerating. The estimated combined sales of BEV and PHEV in 2022 will be in excess of 8 million units. Regulations also remain an important driving force for the market. There is fierce competition among automakers and automakers of disparate types and backgrounds have distinct future development priorities. However, accelerating capacity expansion is the primary developmental focus for all types of automakers. The years 2022-2024 will be the target for many emerging automakers to achieve mass production. This will further promote heightened competition in the electric vehicle market including in price, performance, technical specifications, etc.

In addition, after the rapid growth in sales of electric vehicles, TrendForce has articulated that retired batteries have become another business opportunity. Both China and Europe have new regulations pending which place requirements on electric vehicle battery performance, recycled materials, utilization rate of recycled materials, battery second-life (echelon utilization), disposal, etc. In addition, specific battery information and traceability is also commonly promoted as part of these regulations, which entail additional time pressure on automotive companies and the supply chain due to various management measures required in the battery life cycle. A multitude of demands spur car manufacturers and supply chains to seek external partnerships and increased investment to meet regulatory requirements.

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With the explosion of new energy vehicle (NEV) production and sales, the installed capacity of power batteries has also seen rapid growth, in turn promoting the rising demand for battery materials, according to TrendForce’s investigations. Among battery materials, cathode materials are most in demand for power batteries and their shipments have benefited from the rapid growth of the NEV market. It is estimated that the global demand for power battery cathode materials in 2021 will reach 600,000 tons and this number is expected to exceed 2.15 million tons by 2025.

As the largest downstream application market for lithium batteries, electric vehicles account for more than 60% of total lithium battery consumption. With estimated total consumption of lithium batteries for electric vehicles worldwide reaching 310GWh this year, corresponding demand for cathode materials will reach approximately 604,000 tons.

According to statistics from the China Association of Automobile Manufacturers, China’s NEV sales reached 2.99 million vehicles between January and November of this year, accounting for approximately 50% of total global sales of NEVs, and becoming the key to boosting global demand for power battery installations. During this period (January to November), the installed capacity of power batteries in the Chinese market reached 128.3GWh, a YoY growth rate of 153.1%. The cumulative installed capacity of lithium iron phosphate batteries reached 64.8GWh, surpassing the 63.3GWh installed capacity of ternary batteries for the first time.

TrendForce believes, benefiting from strong market demand for electric vehicles, lithium battery material manufacturers (representative of cathode materials) have started a new round of large-scale production expansion this year and are expected to gradually release new production capacity in the next 2 to 3 years, relieving tight market demand. At present, the overall capacity utilization rate of China’s cathode material industry is not high. Taking lithium iron phosphate materials as an example, the capacity utilization rate of China’s lithium iron phosphate cathode materials in 2020 is approximately 44% and expected to rise to 56% this year. Whether or not future global market demand of more than 2 million tons can be met will depend on whether new production capacity of cathode materials can come online according to schedule and whether the supply of key raw material lithium carbonate is sufficient.

For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

Along with the swift development of the Chinese new energy vehicle (NEV) industry, the number of retired power batteries has risen year over year with Chinese waste power battery volume estimated to exceed 18GWh in 2021 and reach 91GWh by 2025, according to TrendForce’s latest investigations. Currently, power battery recycle and reuse is primarily divided into echelon utilization and material recycling. Chinese waste battery material recycling already possesses a certain scale with a 2020 market size of RMB2.4 billion and it is estimated to reach RMB26 billion by 2025.

TrendForce adds, the current Chinese Ministry of Industry and Information has officially announced the “14th 5-Year Industrial Green Development Plan,” expressing a wish to promote a transformation in resource utilization. In terms of the recycling and reuse of waste power batteries, it proposes a comprehensive set of laws and regulations for power battery recycling, exploring and promoting new business models such as “internet + recycling,” strengthening traceability management, encouraging upstream and downstream enterprises in the industrial chain to build shared recycling pipelines, and establishing a set of centralized recycling service stations. In addition, scaled echelon utilization in fields such as waste power battery energy storage, backup, charging, and exchange will be promoted to establish a set of echelon utilization and recycling projects and build a more complete power battery recycling structure by 2025.

Power battery recycling and reuse include echelon utilization and materials recycling. In echelon utilization, power batteries with charge capacities that have dropped to 80% or less are used in applications such as power backup, energy storage, or other related fields. Currently, most examples of echelon utilization are at an experimental demonstration stage. In materials recycling, retired power batteries are dissembled, valuable metals such as lithium, cobalt, and nickel recycled, and reused in the recycled manufacturing of battery materials (e.g. ternary precursors).

TrendForce believes the development of NEVs is an important avenue in the promotion of energy conservation. The rapid development the industry will inevitably be accompanied by the large-scale retirement of power batteries in the future and bring industry opportunities for power battery recycling and downstream echelon utilization. Currently, the battery recycling business still faces a number of bottlenecks such as the fragmentation of power battery life cycle information, a lack of testing standards for retired batteries, improvement of technical standards for echelon utilization, and fluctuations in metal pricing affecting the economics of material recycling. These are all factors that restrict the recycling and reuse of power batteries. China’s new battery recycling policy will promote the orderly and healthy development of the lithium battery industry in the future and help break through the constraints of lithium and other key global resources.

For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com

Owing to the EV market’s substantial demand for longer driving ranges and shorter charging times, automakers’ race towards high-voltage EV platforms has noticeably intensified, with various major automakers gradually releasing models featuring 800V charging architectures, such as the Porsche Taycan, Audi Q6 e-tron, and Hyundai Ioniq 5. According to TrendForce’s latest investigations, demand from the global automotive market for 6-inch SiC wafers is expected to reach 1.69 million units in 2025 thanks to the rising penetration rate of EVs and the trend towards high-voltage 800V EV architecture.

The revolutionary arrival of the 800V EV charging architecture will bring about a total replacement of Si IGBT modules with SiC power devices, which will become a standard component in mainstream EV VFDs (variable frequency drives). As such, major automotive component suppliers generally favor SiC components. In particular, Tier 1 supplier Delphi has already begun mass producing 800V SiC inverters, while others such as BorgWarner, ZF, and Vitesco are also making rapid progress with their respective solutions.

At the moment, EVs have become a core application of SiC power devices. For instance, SiC usage in OBC (on board chargers) and DC-to-DC converters has been relatively mature, whereas the mass production of SiC-based VFDs has yet to reach a large scale. Power semiconductor suppliers including STM, Infineon, Wolfspeed, and Rohm have started collaborating with Tier 1 suppliers and automakers in order to accelerate SiC deployment in automotive applications.

It should be pointed out that the upstream supply of SiC substrate materials will become the primary bottleneck of SiC power device production, since SiC substrates involve complex manufacturing processes, high technical barriers to entry, and slow epitaxial growth. The vast majority of n-Type SiC substrates used for power semiconductor devices are 6 inches in diameter. Although major IDMs such as Wolfspeed have been making good progress in 8-inch SiC wafer development, more time is required for not only raising yield rate, but also transitioning power semiconductor fabs from 6-inch production lines to 8-inch production lines. Hence, 6-inch SiC substrates will likely remain the mainstream for at least five more years. On the other hand, with the EV market undergoing an explosive growth and SiC power devices seeing increased adoption in automotive applications, SiC costs will in turn directly determine the pace of 800V charging architecture deployment in EVs.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com