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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• [News] Continuous Breakthroughs in SiC Substrates, Global 8-Inch Fab to Reach 11

(Photo credit: JSG)

On March 27, Wolfspeed announced the topping out of construction at the its largest and most advanced John Palmour Manufacturing Center for Silicon Carbide.

According to its introduction, the “John Palmour Silicon Carbide Manufacturing Center” has a total investment of USD 5 billion, covering 445 acres. The first phase of construction is expected to be completed by the end of 2024. Wolfspeed CEO Gregg Lowe stated that the factory has begun installing ingot equipment, and it is estimated that production will start in December 2024 or January 2025.

The factory will mainly produce 200mm (8-inch) silicon carbide wafers, which are 1.7 times the size of 150mm (6-inch) wafers. This will meet the demand for the next generation of semiconductors critical for energy transformation and AI artificial intelligence.

It is reported that the ramp-up of the “John Palmour Silicon Carbide Manufacturing Center” will provide support for customers like Renesas and Infineon. Currently, Wolfspeed manufactures over 60% of the world’s silicon carbide wafer at its headquarters in Durham, North Carolina. It is worth mentioning that, Wolfspeed is carrying out a capacity expansion plan with a total investment of USD 6.5 billion.

In recent years, driven by the burgeoning development in applications such as new energy vehicles, 5G, solar energy, and photovoltaics, the demand for silicon carbide has shown explosive growth. According to previous data statistics from TrendForce, the overall market size of silicon carbide power device reached USD 2.28 billion in 2023 with 41.4% YoY, which is expected to stand at USD 5.33 billion by 2026.

Given the promising market prospects, major silicon carbide-related companies worldwide are accelerating their strategic deployments. Recently, reports of investments and progress in various silicon carbide industry projects.

Globally, Mitsubishi Electric is scheduled to open a new 8-inch SiC plant in Japan in April this year, and plans to put it into operation in 2026. European graphite materials and silicon carbide substrate supplier Mersen is expanding its silicon carbide substrate production capacity by obtaining investment from the French government.

In China, SICC announced to spend CNY 500 million to invest in “Silicon Carbide Semiconductor Materials Project”. TANKEBLUE’s silicon carbide project completed the second phase of the main body; Ascen Power steps up the production of its silicon carbide wafer manufacturing project phase I.

On the other hand, the joint venture of San’an and Li Auto has started pilot production of its  automotive-grade silicon carbide wafer and module project with a total investment of 1 billion; a large-size silicon carbide single crystal substrate industrialization project signed in Lishui, Zhejiang, China. Nantong Semiconductor Equipment SiC components project started the second phase. TonyTech intend to expand the 6-inch silicon carbide substrate materials project with a capacity of 200,000 pieces annually.

Cases of collaboration between enterprises frequently came up since 2024. For instance, Infineon has signed a long-term contract with SK Siltron for silicon carbide wafer, Innosilicon and STMicroelectronics have signed a silicon carbide strategic cooperation agreement in Shenzhen of China, the same as United Nova Technology and Li Auto.

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• [News] Continuous Breakthroughs in SiC Substrates, Global 8-Inch Fab to Reach 11

(Photo credit: Mitsubishi Electric)

Benefited from robust demand in downstream application markets, the silicon carbide (SiC) industry is in high gear. According to TrendForce, the SiC power device market is expected to reach USD 5.33 billion by 2026, with its mainstream applications still highly reliant on electric vehicles and renewable energy sources.

Recently, the widely-publicized SiC market has seen new developments involving companies such as Mitsubishi Electric, Mersen, and Ascen Power.

• Mitsubishi Electric to Begin Construction of SiC Fab in April

According to recent reports from Nikkei, Mitsubishi Electric plans to commence construction of a new 8-inch SiC fab in Kumamoto Prefecture, Japan, in April 2024, with operations scheduled to start in April 2026.

In March 2023, Mitsubishi Electric announced the plan to invest approximately JPY 100 billion (Around CNY 4.856 billion) over five years to construct an 8-inch SiC fab and enhance related production facilities. The fab is projected to kick-start operation in April 2026.

The new fab, spanning six floors with a total floor area of around 42,000 square meters, will primarily handle front-end processes for 8-inch SiC wafers. Mitsubishi Electric will introduce an automated transport system across all processes to create a highly efficient production line and plans to gradually increase capacity, aiming to increase SiC production capacity by five times by the fiscal year 2026 (compared to fiscal year 2022).

In May 2023, Mitsubishi Electric signed a MOU with Coherent to supply 8-inch n-type 4HSiC wafers for the new factory. Both parties are committed to expanding the production scale of 8-inch SiC devices.

• Ascen Power Accelerates Phase One Capacity Ramp-up of SiC Chip Manufacturing Project

Recently, Shao Yonghua, the plant manager of Ascen Power’s fab, introduced that the entire fab is currently ramping up capacity, with the planned capacity of producing 240,000 pieces of 6-inch automotive-grade SiC chips annually expected to be achieved by the end of this year.

The reserved 8-inch production line is adjacent to the 6-inch line and will have the capability to produce 240,000 pieces of 8-inch automotive-grade SiC chips annually once completed.

As previously reported, Ascen Power’s SiC chip manufacturing project is a major project under Guangdong’s “Strengthening Chip Technology Project,” with a total investment of CNY 7.5 billion, covering an area of 150 acres.

The first phase involves an investment of CNY 3.5 billion to build a production line capable of producing 240,000 pieces of 6-inch SiC chips annually, with the second phase focusing on establishing a production line capable of producing 240,000 pieces of 8-inch SiC chips annually. The products include IGBTs, SiC SBD/JBS, SiC MOSFETs, targeting applications including new energy vehicles, photovoltaics, smart grids.

In November 2022, the project’s clean room was officially put into use, achieving a monthly production capacity of 10,000 pieces. Its automotive-grade and industrial-grade chips have been successfully mass-produced and sampled, and these chips are about to complete the automotive verification. Up to now, Ascen Power has signed agreements with more than 40 customers and achieved tape-out, covering most SiC chip design companies nationwide.

• Mersen To Rev up SiC Wafer Production

On March 12, European graphite materials and silicon carbide wafer supplier Mersen announced that it has received investment from the French government for capacity expansion of its SiC wafer project. The subsidy amount may exceed Euro 12 million (Approximately CNY 94 million), sourced from the “France 2023 Plan”—a significant joint interest project in microelectronics and communication technology in Europe.

Mersen stated that they intend to advance the research and industrial production of p-SiC wafers with this investment. p-SiC is a low-resistivity polycrystalline SiC wafer that can be combined with single-crystal SiC active layers, enabling SiC device manufacturers to improve production yield and transistor performance.

Mersen expects to invest Euro 85 million (Approximately CNY 670 million) between 2023 and 2025, employ 80 to 100 staff, promote capacity construction at the Gennevilliers plant in France, and accomplish a potential manufacturing capacity of 400,000 wafers (150mm) by 2027.

Additionally, Mersen will supply SiC wafers to Soitec. In November 2021, two sides entered into a strategic partnership to jointly develop polycrystalline SiC wafers with extremely low resistivity for SiC power electronic components based on Soitec SmartSiC technology, leveraging their respective expertise in substrates and materials.

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• [News] Continuous Breakthroughs in SiC Substrates, Global 8-Inch Fab to Reach 11

(Photo credit: Mitsubishi Electric)

With a financial boost from the Japanese government, electronic giants ROHM and Toshiba are joining forces in the power semiconductor industry. Collaboratively, they plan to not only enhance production but also delve into the realm of research and development, aiming to expand the capacities for Silicon Carbide (SiC) and Silicon (Si) power semiconductors.

In a joint announcement on December 8th, ROHM and Toshiba revealed their strategic collaboration in power semiconductor ventures, pooling a substantial investment totaling 388.3 billion Japanese Yen (ROHM: 289.2 billion JPY, Toshiba: 99.1 billion JPY). This capital injection aims to boost the capacities for SiC semiconductors, Si power semiconductors, and SiC wafers. The Japanese Ministry of Economy, Trade, and Industry is set to provide a generous subsidy, reaching up to 129.4 billion Japanese Yen for this collaborative venture.

Power semiconductors stand as the key necessity for energy-efficiency in electric vehicles (EVs) and industrial equipment. With a surge in global demand, ROHM concentrates its investment in SiC semiconductors, while Toshiba focuses on Si power semiconductors. The overarching objective is to elevate international competitiveness by fostering a robust collaborative manufacturing alliance.

As per report by the Japan Times, ROHM and Toshiba are embarking on a reciprocal production arrangement for power semiconductors. Toshiba leans significantly on ROHM for SiC semiconductor production, while ROHM entrusts Toshiba with the manufacturing of selected Si power semiconductors. The construction of Toshiba’s new plant in Nomi, Ishikawa Prefecture, sets the stage for Si power semiconductor supply commencing in March 2025. Meanwhile, ROHM’s new plant in Kunitomi, Miyazaki Prefecture, gears up to deliver SiC power semiconductors starting from April 2026.

Both two companies set up their goals in terms of future expansion in capacity. Toshiba envisions expanding power semiconductor capacity to 2.5 times that of the 2021 fiscal year by the 2024 fiscal year. Simultaneously, ROHM aims to elevate SiC power semiconductor capacity to 6.5 times that of the 2021 fiscal year by the 2025 fiscal year, with further expansions to 35 times by the 2030 fiscal year.

ROHM President and CEO, Isao Matsumoto, also shared the insights aiming the collaboration. In an interview with Nikkei Asia released on December 16th, Matsumoto expressed the company’s aspirations to broaden its power semiconductor collaboration with Toshiba, extending beyond production into the research and development.

Matsumoto stated that both companies aim to “discuss collaboration in development” after the launch of the joint production of power devices announced previously.

Matsumoto also emphasized that they will commence with commissioned production, and implied the possibility to enter the next stage. Looking ahead, He hope to explore collaboration involving engineer exchanges and development. When probed about the possibility of this collaboration leading to future business integration, he responded there is not definitive decision by now.

Kyodo News underscored that while Japanese firms have a significant presence in the global power semiconductor market, they often trail behind their European and American competitors, holding a market share in the 20% range. As a result, it is an urgent priority for Japanese firms to enhance international competitiveness, expand scale, and improve efficiency. This collaboration between ROHM and Toshiba is poised to serve as a catalyst for expediting the collaboration of other Japanese firms.

(Image: ROHM)

SiC industry giant Wolfspeed issued a press release on December 4th, formally selling its radio frequency business (Wolfspeed RF).

Back to August 22nd of this year, Wolfspeed had announced the sale of Wolfspeed RF to the U.S. semiconductor company MACOM Technology Solutions Holdings, Inc.

Under the transaction terms, Wolfspeed received approximately USD 75 million in cash, subject to a customary purchase price adjustment, and 711,528 shares of MACOM common stock, which shares had a market value of approximately USD 60.8 million based on the closing price for MACOM’s common stock on December 1st, 2023 as reported on the Nasdaq Global Select Market.

MACOM specializes in designing and producing high-performance semiconductor products. Their product range spans radio frequency, microwave, analog and mixed-signal, and optical semiconductor technologies, catering to industries such as telecommunications, industrial applications, defense, and data centers. Headquartered in Lowell, Massachusetts, USA, MACOM’s business footprint extends across the United States, Europe, Asia, and beyond. With the successful completion of this business acquisition, the company’s impact in the radio frequency domain is poised to experience notable reinforcement.

President of CEO of Wolfspeed Gregg Lowe said, “The completed sale of Wolfspeed RF is the final step in our transformation, and we’re happy to say Wolfspeed is now the only pure-play silicon carbide semiconductor manufacturer in the industry. As demand continues to accelerate across the automotive, industrial and renewable energy markets, we can now focus on innovation and capacity for our materials and power device businesses.”

TrendForce reveals a future landscape for the SiC power device market, projected to reach USD 5.33 billion by 2026, driven by robust demand in downstream applications, particularly in electric vehicles and renewable energy. Despite this positive outlook, the SiC industry faces constraints due to supply issues in SiC substrates.

Wolfspeed’s recent decision to divest its radio frequency business further underscores the company’s commitment to maintaining a leading role in the SiC substrate market, where it currently stands as the sole producer capable of mass-producing 8-inch SiC substrates.

Current situation of the SiC substrate industry         

Considering the SiC substrate industry dominated by few players, Wolfspeed stands out as a notable example. More and more companies are opting to enhance their production capacity for high-quality SiC substrates used in automotive main inverters.

The SiC substrate industry is actively addressing challenges of low demands and high cost, making various companies to expand from 6-inch to 8-inch SiC substrates. While Wolfspeed is ahead in the production of 8-inch SiC substrates, other industry leaders are also making notable progress:

• Rohm has established an 8-inch SiC wafer fab in Japan, scheduled to commence 8-inch substrate production next year.
• Coherent’s SiC subsidiary secured a substantial USD 1 billion investment from Japan’s Denso and Mitsubishi Electric to produce 6/8-inch substrates.
• STMicroelectronics and Sanan Optoelectronics are collaborating on an 8-inch SiC wafer fab in Chongqing, with gradual production expected to start from 2025. Concurrently, Sanan will establish an 8-inch SiC substrate fab.

Moreover, several Chinese companies, including SEMISiC, Jingsheng, Summit Crystal, Synlight, KY Semiconductor, and IV-SemiteC, are actively advancing the development of 8-inch SiC substrates, contributing to the overall progress in the SiC substrate industry.

Wolfspeed’s Optimism Amid Industry Upgrades

In the face of industry upgrades and competitive pressures, Wolfspeed’s leadership remains optimistic. Looking into its result in second quarter of fiscal 2024, Wolfspeed targets revenue from continuing operations in a range of USD 192 million to USD 222 million. GAAP net loss from continuing operations is targeted at USD 131 million to USD 153 million. Non-GAAP net loss from continuing operations is targeted to be in a range of USD 71 million to USD 88 million. Based on the result, Wolfspeed aim to meet 20% utilization goal at the Mohawk Valley Fab in next quarter. The company predicts the revenue of the fab will rise from USD 4 million to USD 10~15 million. The third quarter revenue will grow significantly as well.

Being the only front runner in the global market solely dedicated to SiC business, Wolfspeed can channel all its focus and resources into SiC materials and power device operations. As Wolfspeed enhances the capacity of its fabs, there is potential for a further increase in its market share for SiC materials and power devices. In response to this evolving landscape, other companies are likely to expedite the research and production of 8-inch SiC substrates, aiming to enhance their market presence and actively contribute to the overall advancement of the SiC industry chain.
(Image: Wolfspeed, MACOM)

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