Onsemi, a semiconductor manufacturer, announced at the end of April that it had signed a Long-Term Supply Agreement for SiC power components with Zeekr, a subsidiary of Geely Auto Group. Geely Automotive will use Onsemi’s EliteSiC power components to optimize energy conversion efficiency in its electric drive system. This move signals Onsemi’s aggressive expansion in the automotive SiC market, catching up to leading manufacturers STMicroelectronics and Infineon.

In the SiC semiconductor market for electric vehicles, STMicroelectronics and Infineon have maintained their market leadership by entering the market early, while Wolfspeed and ROHM have gained traction through their vertical integration technology for SiC. On the other hand, Onsemi still lags behind in terms of market share for SiC power semiconductors, even though it acquired GT Advanced Technologies in 2021 and mastered the most difficult wafer growth and production equipment technology in SiC manufacturing. Before 2023, Onsemi was only used in small and medium-sized vehicle models such as NIO and Lucid.

However, Onsemi’s benefits begin to materialize in 2023, thanks to the industry maturity built by early players such as Infineon and STM, combined with Onsemi’s early deployment of SiC-related technology. Onsemi’s SiC product EliteSiC has obtained LTSA from Zeekr, BMW, Hyundai and Volkswagen in the form of discrete and modules. Its CEO, Hassane El-Khoury, has stated that the SiC business will generate $4 billion in revenue over the next three years compared to the total revenue for the 2022 SiC market of approximately $1.1 billion. These factors have made Onsemi the most talked-about semiconductor company in the SiC market this year.

However, the intense competition in the SiC market will test the endurance of resource input sustainability. The rapid growth in SiC demand over the past five years is mainly due to high battery costs and the development of energy density having reached its limit. Car manufacturers have switched to using SiC chips in their electronic components to increase driving range without increasing the number of batteries.

As a result, car manufacturers are aggressively pushing semiconductor companies to accelerate their research and development of SiC technology. This has resulted in a significant reduction in R&D time, but also an increase in R&D costs. Coupled with the impact of intense market competition on profits, the ability to sustain R&D resource input and overall profitability performance will be the key indicators of semiconductor companies’ competitiveness.

Onsemi has successfully improved its profitability performance by streamlining its product lines over the past few years, ranking at the top with a 49% gross margin, according to the financial reports of various semiconductor companies in 2022. This profitability performance allows Onsemi to meet car manufacturers’ cost requirements and secure orders, thereby achieving economies of scale in SiC product growth.

However, in terms of R&D costs as a percentage of revenue, Onsemi ranks last at 7%, compared to its main competitors Wolfspeed (26%), Infineon (13%), STM (12%), and ROHM (8%). With semiconductor companies investing more in technologies such as reducing on-resistance and improving yield rates, how to maintain a balance between profitability performance and resource expenditure while achieving revenue goals through intense market competition will be an important challenge for Onsemi after securing orders from car manufacturers.

(Source: Zeekr)

With the continuous deterioration of the global environment and the exhaustion of fossil fuel energy, countries around the world are looking for new energy sources suitable for human survival and development. The construction of photovoltaic energy storage projects is an important measure to implement energy transformation. Third-generation semiconductors have the characteristics of high frequency, high power, high voltage resistance, high temperature resistance, and radiation resistance, which can promote highly efficient, highly reliably, and low cost of photovoltaic energy storage inverters and the green and low-carbon development of energy.

SiC will be widely used in high-power string/central inverters, while GaN is more suitable for household micro-inverters

As the photovoltaic industry enters the era of “large components, large inverters, large-span brackets, and large strings,” the voltage level of photovoltaic power plants has increased from 1000V to over 1500V and high-voltage SiC power components will be used extensively in string and centralized inverters. For residential micro-inverters with a power of up to 5kW, GaN power components have more advantages. Not only can they significantly improve overall conversion efficiency, effectively reduce the levelized cost of energy (LCOE), but also allow users to easily build smaller, lighter, and more reliable inverters.

Key SiC substrates are crucial to the development of third-generation semiconductors and major manufacturers are competing to get to market

SiC substrate is regarded as the core raw material of third-generation semiconductors. Its crystal growth is slow and process technology complex. Mass production is not easy. Conductive substrates can produce SiC power electronic components while semi-insulating substrates can be used for the fabrication of GaN microwave radio frequency components. In addition, due to the high difficulty of substrate preparation, its value is relatively high. The cost of SiC substrate accounts for approximately 50% of the total cost of components which demonstrates its importance in the industrial chain.

At present, the supply of the global SiC market is firmly in the hands of substrate manufacturers. Wolfspeed, II-VI and SiCrystal (subsidiary of ROHM) together account for nearly 90% of shipments. IDM manufacturers such as Infineon, STM, and Onsemi are actively developing upstream SiC substrates and expect to take full advantage of the supply chain to strengthen their competitiveness. Everyone wants to get a piece of the pie, so the battle for SiC substrates will become more and more fierce, but the wait will not be long to see where the industry eventually goes in coming years.

（Image credit: Pixabay ）