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In recent years, the tech industry has pivoted around two keywords, low carbonization and digitization, marking significant areas of growth. Semiconductor companies are eagerly investing and acquiring ventures, particularly in response to the emerging new energy industry chain driven by the low-carbon trend.
At the recent Infineon OktoberTech™ event, David Poon, Senior Vice President and President of Greater China Region at Infineon, outlined the company’s ambitious goals. By the end of 2030, Infineon aims to secure a 30% market share in the SiC market, targeting an annual revenue exceeding USD 7.6 billion. As per a report from 21jingji, Infineon also holds a positive outlook on the overall market growth of third-generation semiconductors.
The current landscape sees widespread application of third-generation semiconductors like SiC and GaN in new energy vehicles, charging stations, energy storage, and other products. Major industry players are actively entering this dynamic market. As a dominant force in power semiconductors, Infineon not only announced SiC expansion plans earlier this year but also acquired GaN Systems in October.
Speaking of recent GaN acquisition, Poon expressed during an interview that the collaboration between the two companies would significantly propel Infineon’s development. They believe that GaN has reached a turning point, extending its applications beyond chargers to encompass diverse fields like energy storage, heralding a phase of substantial growth. A new round of competition is unfolding within the realms of the new energy field and the industrial ecosystem.
New Energy and Digitization as Growth Drivers
In terms of performance, Infineon achieved remarkable double-digit growth in the past year. According to the full-year financial report for the 2023 fiscal year (ending September 30, 2023), the company’s revenue reached USD 17.868 billion marking a 15% YoY increase, while profits surged by 30% to USD 4.819 billion.
Jochen Hanebeck, CEO of Infineon, acknowledged the company’s record-breaking revenue and profits in the 2023 fiscal year, despite acknowledging the persisting challenges in the operating environment.
On one hand, there’s a persistent structural growth momentum in renewable energy, electric vehicles (particularly in China), and the micro controller sector within the automotive industry. On the other hand, demand for applications in consumer goods, communications, computing, and the IoT is currently experiencing a temporary lull. Infineon anticipates continued revenue growth in the 2024 fiscal year, although the pace of growth is expected to moderate. The company is actively responding to market conditions, seizing opportunities for structural growth.
The new energy and digitization markets emerge as the new growth engines targeted by leading semiconductor companies like Infineon. With China at the forefront of the industry’s new landscape, Infineon is keen on tapping into new opportunities in the Chinese market.
In an interview, Poon remarked, “Looking at low carbonization, firstly, the growth in new energy vehicles is substantial. According to data from the China Association of Automobile Manufacturers (CAAM), from January to September 2023, the production and sales of new energy vehicles reached 6.313 million and 6.278 million units, respectively, with YoY increases of 33.7% and 37.5%. The semiconductor value in an electric vehicle has increased by about USD 950 compared to a traditional fuel vehicle, making this a significant driving force.”
He further emphasized, “The amounts of domestic new energy vehicle shipments and exports are robust. Additionally, the proliferation of charging stations in the country indicates clear prospects for this market. In other areas of new energy, such as photovoltaics, wind power, and energy storage, these are also growth drivers we are closely monitoring.”
New energy vehicles and renewable energy have evolved into the foundational pillars of the burgeoning low-carbon mega-industry. Simultaneously, within the digitization market, Infineon offers solutions related to data centers. “Apart from data centers, in domains like smart factories, smart cities, and smart homes, we provide digitization and low-carbon solutions to enhance efficiency. Digitization serves as a significant driving force,” highlighted Poon.
SiC and GaN Operating in Tandem
In the current landscape of the new energy market, third-generation semiconductors such as SiC and GaN have gained significant traction. Taking the more mature development of SiC as an example, although it is still undergoing iterative development, it has found extensive applications in the automotive field, experiencing rapid growth.
TrendForce predicts that the SiC power component market in the automotive sector will witness substantial growth, from USD 1.09 billion in 2022 to USD 3.98 billion in 2026, with a compound annual growth rate of 38%.
Presently, SiC faces supply shortages, prompting major makers to scale up production. Infineon, for instance, has announced a substantial expansion of its Kulim wafer fab in Malaysia, aiming to establish the world’s largest 8-inch SiC power wafer fab. Poon noted that the first phase is slated to commence production in mid-next year, with the second phase scheduled for production in 2027. This expansion is driven by the broad market demand for SiC across applications like AI, automotive, and new energy photovoltaics.
As per TrendForce, the collective market size of SiC power components in 2023 reached USD 2.28 billion, witnessing a notable 41.4% YoY growth. Projections suggest that by 2026, the SiC power component market could reach an impressive USD 5.33 billion, with the automotive sector’s SiC power component market poised to surge to USD 3.94 billion.
Besides Infineon, major players like Wolfspeed and STMicroelectronics are actively bolstering their production capacities. In June this year, STMicroelectronics announced plans to establish an 8-inch SiC device manufacturing joint venture with Sanan Optoelectronic in China. The commencement of production is anticipated in the fourth quarter of 2025, with full completion scheduled for 2028, involving a total construction cost of approximately USD 3.2 billion. Wolfspeed, in collaboration with the German automotive giant ZF Group, not only established a joint innovation laboratory for SiC but is also in the process of constructing a SiC device factory in Germany.
According to TrendForce, The GaN market is primarily propelled by consumer electronics, with a core emphasis on fast charging. Other consumer applications include audio, wireless charging, power, and consumer products. However, many companies have already shifted their focus to industrial markets such as data centers, renewable energy, and the new energy vehicle market, with numerous companies persistently conducting R&D in this direction.”
Overall, semiconductor giants are strategically navigating both SiC and GaN, intensifying efforts in the realm of third-generation semiconductors and fortifying a more comprehensive industrial chain.
(Image: Infineon)
News
During an earnings call in November 2023, Isao Matsumoto, President of ROHM Semiconductor, disclosed the company’s plans to the production of 8-inch SiC substrates at its second plant in Miyazaki, Japan, starting in 2024. This is the first time ROHM will produce SiC substrates in Japan.
Notably, the Miyazaki Plant No.2 Project is part of ROHM’s ongoing capacity expansion strategy. The company intends to invest between 170 and 220 billion yen in its SiC business from 2021 to 2025.
For SiC power semiconductor manufacturers like ROHM, it’s imperative to bolster their SiC substrate production capacity. This is driven by two key factors. Firstly, there has been a shortage of substrate materials, which has posed a challenge for the SiC power semiconductor industry. Secondly, the growing wave of electric vehicles has led to an increased demand for SiC power semiconductors.
To thrive in the SiC power semiconductor industry and capture a big market share, major companies are actively investing in expanding their production capacity. They often choose to form supply agreements with suppliers, set up their own production lines, or acquire related businesses.
ROHM previously established a pioneering position in the industry by producing SiC substrates at its plant in Nuremberg, Germany, following the acquisition of SiCrystal, a German SiC substrate manufacturer.
The Miyazaki plant no.2, scheduled to start production in 2024, was originally the Kunitomi plant of Solar Frontier, a subsidiary of Idemitsu Kosan. In July of this year, ROHM announced its acquisition of the assets of Solar Frontier’s former Kunitomi plant, a deal that concluded in October. It’s worth noting that this plant will become ROHM’s largest SiC power semiconductor production hub in Japan.
While pursuing acquisitions, ROHM is also actively expanding its in-house production capacity. According to information on ROHM’s official website, the company currently operates four SiC power semiconductor production plants in Japan, located at its Kyoto headquarters, Chikugo Plant in Fukuoka, Nagahama Plant in Fukuoka, and Miyazaki plant no.1.
Both acquisitions and in-house production strategies help ensure a reliable product supply. However, in the dynamic SiC industry, forward-thinking leaders are eager to secure additional production capacity in advance. Collaboration with established manufacturers is a common approach, and ROHM is no exception.
In June of this year, ROHM signed a long-term supply partnership agreement for SiC power devices with Vitesco. According to this agreement, the combined transactions between the two companies from 2024 to 2030 will exceed 130 billion yen.
(Image: ROHM)
News
On November 4th, the “Annual Production of 250k 6-inch and 50k 8-inch SiC Substrate Project” was officially initiated by China Jingsheng Mechanical & Electrical Co., Ltd. (JSG). It is driven by the objective of advancing crucial core technologies in semiconductor material development, ultimately leading to the establishment of a domestically produced alternative for China.
The total investment for this agreement reached an impressive 2.1 billion CNY. During the launch ceremony, Dr. Jianwei Cao, Chairman of JSG, underscored the pivotal role of this project in the company’s growth strategy.
JSG, founded in 2006 and headquartered in Zhejiang, China, made its debut on the Shenzhen Stock Exchange in 2012. The company specializes in developing essential semiconductor materials, including silicon, sapphire, and SiC. It provides equipment and services to the semiconductor and photovoltaic industries.
Since 2017, JSG has been deeply engaged in SiC ingot growth equipment and process development, achieving the successful production of 6-inch and 8-inch SiC ingots and substrates. The company is among the select few capable of supplying 8-inch substrates in China. They have successfully established a pilot line for the growth, slicing, and polishing of 6-8-inch SiC ingots. The 6-inch substrates have received validation from several downstream companies and are rapidly progressing, while the 8-inch substrates are in the small-scale trial production phase.SiC, as an iconic material for third-generation semiconductors, is renowned for its outstanding physical properties, rendering it suitable for various applications such as new energy vehicles, photovoltaic energy storage, data centers, 5G communication, and ultra-high-voltage (UHV). In recent years, there has been a sustained surge in demand for SiC due to its remarkable properties. However, the widespread commercialization of SiC has been hampered by cost-related challenges.
A cost analysis of the SiC industry reveals that substrate expenses account for approximately 40% of the overall costs, making it a pivotal aspect of cost reduction. The interest of leading companies in large-sized substrates is attributed to their higher utilization rates, contributing significantly to cost reduction.
GlobalWafers, the world’s third-largest silicon wafer manufacturer, plans to embark on large-scale production of advanced SiC substrates in 2025 to meet the surging demand for power semiconductors in the automotive sector. Doris Hsu, Chairman and CEO of GlobalWafers, recently announced that the company is set to commence qualification and test production of 8-inch SiC substrates in the upcoming year, with large-scale production slated for 2025.
On the other hand, SICC, a company also engaged in SiC substrates development, has expedited its capacity expansion in Shanghai Lin-gang Special Area, augmenting the production capacity for conductive substrates since 2022. They have been delivering products since May this year and anticipate a further rise in production capacity during the fourth quarter of 2023. The company is poised to achieve mass production ahead of schedule for the first-phase 300,000-piece capacity and has initiated plans for the second-phase 960,000-piece capacity for 6-inch SiC ingot.
While 6-inch conductive SiC substrate products dominate the market, 8-inch substrates are yet to become ubiquitous. However, SICC announced the development of high-quality 8-inch substrates in 2022. The company is now equipped for mass production of 8-inch products. Notably, during the 2023 Semicon, Dr. Chao Gao, CTO of SICC, disclosed the successful creation of low-defect-density 8-inch ingots using a liquid-phase method.
(Image: SICC)
In-Depth Analyses
Escalating demand in sectors like electric vehicles, 5G communications, photovoltaics, and memory storage is currently fueling the rapid growth of the silicon carbide (SiC) industry. Key players in China are intensifying their research and development efforts to overcome technological challenges and secure a substantial market share.
The arrival of 8-inch SiC substrates is crucial and marks a technological significant milestone that everyone desires, opening up new possibilities.
The Turning Point: 8-Inch SiC Substrates
As a third-generation semiconductor material, SiC boasts advantages like a wider bandgap, higher breakdown electric field, and exceptional thermal conductivity. Its stellar performance in high-temperature, high-pressure, and high-frequency applications positions it as a cornerstone in the realm of semiconductor materials.
Fueled by growing demand downstream, the SiC industry is in the midst of a high-speed expansion phase. TrendForce’s analysis forecasts the SiC power device market to reach US$2.28 billion in 2023, with an impressive annual growth rate of 41.4%. By 2026, this market is expected to expand further, reaching US$5.33 billion.
From an industry perspective, SiC devices’ cost structure encompasses substrates, epitaxy, tape out, and packaging processes, with substrates accounting for a substantial 45% of total production costs. To reduce per-device costs, the strategy revolves around enlarging SiC substrates and increasing the number of die per substrate. Notably, 8-inch SiC substrates offer distinct cost advantages over their 6-inch counterparts.
Data from Wolfspeed reveals that the transition from 6-inch to 8-inch substrates results in a modest increase in processing costs but yields an impressive 80-90% increase in the production of qualified chips. The greater thickness of 8-inch substrates helps maintain the shape during processing, reduces edge curvature, and minimizes defect density. Consequently, adopting 8-inch substrates can lead to a substantial 50% reduction in unit production costs.
According to TrendForce’s analysis, the SiC industry currently centers around 6-inch substrates, holding an impressive 80% market share, while 8-inch substrates account for only 1%. The transition to larger 8-inch wafers represents a crucial strategy to further reduce SiC device costs. As 8-inch wafers mature, their pricing is expected to be about 1.5 times that of 6-inch wafers, while producing approximately 1.8 times dies compare with 6-inch SiC wafers, greatly improving wafer utilization.
The industry is steadfastly progressing from 6-inch to 8-inch substrates, offering Chinese manufacturers a unique opportunity to surge ahead. TrendForce’s data suggests that the current market share of 8-inch products stands at less than 2%, with a projected growth to approximately 15% by 2026.
Seizing the Moment: Advancing 8-Inch SiC Substrates
Industry experts highlight the dual challenges of growing 8-inch SiC crystals: (1) the development of 8-inch seed crystals and (2) temperature field uniformity, gas-phase material distribution, transportation efficiency, and increased stress leading to crystal cracking.
As per industry insiders, 2023 is poised to become the “Year of 8-Inch SiC.” Throughout the year, global power semiconductor giants like Wolfspeed and STMicroelectronics have accelerated their efforts to develop 8-inch SiC. In China, significant breakthroughs have been achieved in SiC equipment, substrates, and epitaxy segments, with numerous industry leaders forming alliances with international power semiconductor giants.
TrendForce’s data from the Compound Semiconductor Market reveal that 10 enterprises and institutions in China are currently advancing the development of 8-inch silicon carbide (SiC) substrates. These include Semisic, JSG, SICC, Summit Crystal, Synlight, Institute of Physics Chinese Academy of Sciences, Shandong University, TankeBlue, KY Semiconductor, and IV-Semitec.
Here are the list of Chinese companies in the 8-inch SiC substrate field this year:
KY Semiconductor:
IV-Semitec:
Summit Crystal:
Hoshine Silicon:
Synlight:
TankeBlue:
JSG:
SanAn Optoelectronics:
SICC:
News
GlobalWafers has achieved a milestone by successfully advancing silicon carbide (SiC) crystal growth to 8-inch wafers, aligning with major international players in the industry. The company foresees the commencement of small-scale shipments of 8-inch SiC products in Q4 2024, with substantial growth expected in 2025, surpassing the proportion of 6-inch wafers by 2026.
Accourding to CTEE, Doris Hsu, Chairwoman of GlobalWafers, shared that the yield for 8-inch SiC crystal growth has been excellent, with ample room for further expansion, currently exceeding 50%.
The company emphasizes its readiness with 8-inch SiC crystal growth, cutting, grinding, and polishing capabilities, with sample deliveries set for the first half of next year.
Hsu highlighted customers’ eagerness for GlobalWafers to expedite the transition from 6-inch to 8-inch SiC production, aiming for an “8-inch dominant, 6-inch secondary” approach. The increasing demand for 8-inch SiC is primarily driven by automotive customers.
In terms of technology, SiC is moving from 6-inch to 8-inch wafers due to increased demand. TrendForce’s insights indicated, “Currently, the silicon carbide industry is mostly using 6-inch wafers, accounting for nearly 80% of the market share, while 8-inch wafers make up less than 1%. Expanding the wafer size to 8 inches is considered crucial for further reducing the cost of silicon carbide devices.”
From a cost perspective, 8-inch wafers indeed offer substantial advantages, but the challenge of yield has consistently plagued SiC. TrendForce’s earlier research suggests that, when it reaches maturity, an 8-inch wafer’s selling price is approximately 1.5 times that of a 6-inch wafer, and the number of die an 8-inch wafer can produce is about 1.8 times that of a 6-inch SiC wafer, significantly improving wafer utilization.
While GlobalWafers currently manufactures SiC substrates in Taiwan, the future SiC epitaxy will take place in the United States, with plans to expand with two additional substrate and two additional epitaxy facilities.
The production of SiC crystals involves high-temperature and closed-environment growth, which demands meticulous furnace design and crucible material selection, adding complexity to equipment and operations.
GlobalWafers has designed and developed specialized SiC crystal growth furnaces, enhancing material quality control and lowering crystal growth costs. SiC’s high hardness and brittleness make wafer processing challenging, but GlobalWafers employs higher process accuracy and more efficient wafer handling methods to achieve ultra-thin SiC wafer processing.
(Image: GlobalWafers)