The extraordinary ascent of the global silicon carbide (SiC) market is nothing short of remarkable, kick-starting the transition of power semiconductor applications from silicon to SiC back in 2017 when it equipped Tesla’s Model 3. In 2019, chip maker Wolfspeed selected the Marcy Nanocenter site near Utica, New York to build the world’s first 200mm SiC fab based on U.S. soil that was inaugurated in April 2022. Since then, the U.S. SiC gold rush has turned into a global investment frenzy, fueled mainly by increasing demand for electric vehicles (EVs). While it is clear that SiC is a critical technology for the future of semiconductors, does it run the risk of soon becoming a commodity as it moves into the power electronics mainstream?
In this article, Stephen Rothrock, Founder and CEO of ATREG, Jean-Christophe Eloy, President and Founder of Yole Group, and Poshun Chiu, Senior Technology and Market Analyst at Yole Intelligence, part of Yole Group, provide an overview of the global SiC market and their predictions for the future of the revolutionary technology.
Record market growth
According to the newly released 2023 edition of Yole Intelligence’s Power SiC Report, the global power SiC device market is forecast to grow to nearly $9 billion by 2028, a 31% increase over 2022. Automotive applications dominate the SiC market, representing 70% of the power SiC market in 2022, alongside a variety of industrial applications, including transportation, energy, and telecommunications.
Stephen Rothrock Founder and CEO of ATREGIn the 25 years ATREG has been tracking the global semiconductor manufacturing asset market, we have never seen any new technology ramp up so quickly. Despite the downturn our industry is currently experiencing, we are witnessing a very strong upside in SiC. With SiC power devices, major IDMs the world over are seeing an opportunity to grow.
According to Yole Intelligence, STMicroelectronics has been leading SiC device revenue over the past few years. The company generated around $700 million in 2022 and is now expecting $1.2 billion in revenue in 2023. Followed by leading global power electronics Infineon Technologies, the company showed significant revenue growth in the past two years.
Jean-Christophe Eloy President and Founder of Yole GroupWolfspeed, onsemi, ROHM, and Bosch are considered the top players achieving revenue growth. As of 2023, leading companies have implemented IDM business models in order to accelerate time-to-market in this quickly growing and lucrative SiC device business.
Yole Intelligence’s research also reveals that 150mm SiC wafers are currently the main platform for device manufacturing and that there is no volume shipment of eight-inch wafer in the open market. With current or planned fab builds for 200mm SiC, major IDMs are applying different sourcing strategies based on their positions in the semiconductor ecosystem. Wolfspeed is currently the only player working on ramping up 200mm SiC production at its Mohawk Valley, NY fab. Other players are expanding 150mm wafer capacity in house and developing 200mm in parallel. “For companies not planning to move to eight-inch, multiple sourcing of 150mm SiC wafers is the most common adopted approach,” notes Chiu. “In 2021, onsemi acquired SiC wafer company GT Advanced Technologies (GTAT) while ROHM acquired SiCrystal in 2009. However, we understand that these players are also sourcing 150mm SiC wafers in high volume from external wafer suppliers.”
In 2019, STMicroelectronics acquired SiC wafer company Norstel in order to develop internal wafer capacity. In parallel, the company partnered with Soitec for engineered substrates and Sanan Optoelectronics in a $3.2 billion venture for eight-inch SiC wafer supply. Infineon Technologies and Mitsubishi Electric focus on device processing of 200mm SiC platforms and use 200mm wafers from external suppliers.
On August 31st, Bosch announced the completion of the acquisition of TSI Semiconductors’ operational 200mm fab in Roseville, CA, a transaction facilitated by ATREG. Following a retooling phase beginning in 2026, the fab will start producing its first SiC chips on 200mm wafers. Attracting one of Europe’s largest manufacturers to U.S. soil who has only ever produced front-end chips in Germany is a massive win for the U.S. semiconductor industry as Bosch plans to invest $1.5 billion in the Roseville site over the next few years.
Despite being a relative latecomer to the power SiC device market, onsemi’s 2023 Q1 results suggest it is on track to achieve ambitious revenues of $1 billion in 2023. The company’s revenue is heavily driven by the deep engagement of EV shipments as the SiC device supplier of choice to Tesla and other automotive OEMs. As part of their 2021 announced investment of $1 billion in SiC over the next decade, Coherent has accelerated plans for SiC substrate and epitaxial manufacturing expansion in Sweden and the U.S., with the Easton, PA facility expected to reach an annual wafer output of one million 150mm-equivalent substrates by 2027, including 200mm in volume production.
In Europe, Wolfspeed has partnered with ZF to build an advanced 200mm SiC fab in Ensdorf, Germany, a $3 billion investment to support the huge transition of the German automobile industry. ZF itself signed a multi-year supply agreement with STMicroelectronics for SiC devices while STMicroelectronics has received €292.5 from the European Commission for the construction of a fab in Catania, Sicily.
In Asia, the latest announcement comes from Infineon who is planning to build the world’s largest 200mm SiC power fab in Kulim, Malaysia, leading to a potential €7 billion in revenue by the end of the decade. In addition, Renesas partnered with Wolfspeed for the execution of a wafer supply agreement and a $2 billion deposit by Renesas to secure a 10-year supply commitment of SiC bare and epitaxial wafers from Wolfspeed.
Global investment race
Chip makers around the world are highly attentive to the size transition of SiC substrates. With Wolfspeed being the first to activate production capacity for eight-inch, other suppliers are aggressively following suit and vigorously pursuing collaborations with key players both up and down the global supply chain to position themselves favorably in the marketplace. Global capacity at wafer level is growing faster following a multitude of investment announcements. Currently 80% of the world’s SiC substrate is produced on U.S. soil, giving the country a leadership position for such a critical technology that it will want to retain for as long as possible. “By our calculations so far, we estimate current SiC fab investments to amount to close to $14 billion worldwide and that is only the beginning,” shares Rothrock. “With its new John Palmour materials facility in NC, Wolfspeed will multiply its current SiC capacity by 10, with capex investments as a percentage of revenue of 100%. These numbers are staggering.”
Change of focus in supply chain
Yole Intelligence’s latest research highlights a change of focus in the SiC supply chain bottleneck. Large capacity expansion doesn’t simply mean oversupply.
Poshun Chiu Senior Technology and Market Analyst at Yole Intelligence, part of Yole GroupIn 2022, there was a trend of much more massive expansion of SiC wafers than demand. Today’s most recent numbers tell a different story – growing interest in using SiC devices triggers capacity expansion of wafers and devices.
The short SiC wafer supply of 2021 and 2022 led to limited access to SiC wafers for many non-automotive applications as EVs have been the main SiC market driver. The expansion of SiC wafer capacity gets operational in 2023, enabling the growth of the SiC device market. SiC wafers for MOSFET and automotive applications will be less impacted by cost optimization. However, players with lower quality will need to cut price for remaining utilization. We can expect to see higher price erosion of SiC-diode grade wafers. Eight-inch will be mainly kept for internal use in the short to midterm.
So could silicon carbide become the victim to its own success over time? “We could draw a comparison with what happened with sapphire for blue LEDs whereby a reduction in average selling price could likely happen,” says Eloy. “At the time, the price of sapphire decreased dramatically with the significant capacity add-up by Chinese players in the mid-2010. It accelerated the penetration of LEDs in displays and lighting due to competitive prices and device accessibility. When it comes to SiC, the ecosystem will need to deal with the discrepancy of demand/supply and quality.”
“While we wait for new CHIPS Act-funded greenfield fabs to come online, ATREG expects more legacy 200mm as well as compound semiconductor-capable manufacturing assets to be converted into high-volume SiC manufacturing facilities in coming months to bridge the gap for short- to medium-term needed capacity,” concludes Rothrock. “I think it is fair to say that silicon carbide still has a bright future for some time to come.”
About the authors
Stephen Rothrock founded ATREG in 2000 to help global advanced technology companies divest and acquire infrastructure-rich manufacturing assets. Over the last 25 years, his firm has completed more than 100 transactions, representing over 40% of all global operational wafer fab sales in the semiconductor industry for operational, warm, and cold shells. Prior to founding ATREG, Stephen established Colliers International’s Global Corporate Services initiative and headed the company’s U.S. division based in Seattle, Wash. Before that, he worked as Director for Savills International commercial real estate brokerage in London, UK, also serving on the UK-listed property company’s international board. He also spent four years near Paris, France working for an international NGO. Stephen holds an MA degree in Political Theology from the University of Hull, UK and a BA degree in Business Commerce from the University of Washington in Seattle, USA.
Jean-Christophe Eloy is Yole Group’s President and CEO. Founded in 1998, the market research and strategy consulting firm has grown to become a group of companies providing marketing, technology, and strategy consulting, teardown, reverse engineering, and reverse costing analysis in addition to corporate finance services. Jean-Christophe’s mission is to oversee the strategic direction of the Yole Group of companies, including Yole Intelligence, Yole SystemPlus, and PISÉO. All year long, Jean-Christophe builds deep relationships with leading semiconductor companies, discussing and sharing information across his global network. His objective is to get a comprehensive understanding of their strengths and guide their success. Jean-Christophe graduated from the EMLyon Business School (Lyon, France) and from INPG (Grenoble, France).
Poshun Chiu serves as Senior Technology & Market Analyst at Yole Intelligence, part of Yole Group, specializing in compound semiconductor and emerging substrates. As a member of the Power Electronics & Wireless division at Yole, Poshun focuses on power, RF, and opto-electronics. He is engaged in the development of technology and market reports as well as involved in custom projects. Poshun came to Yole with nine years of experience in R&D and product management spent at Epistar (Taiwan and China). He is the author or co-author of more than 10 solid-state-lighting patents. Poshun was also engaged in the development and evaluation of novel applications of process technology and components based on relevant semiconductor material systems. Poshun received an MSc degree in Microelectronics from the National Cheng Kung University (Taiwan) and an MBA from IESEG School of Management (France).
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Senior Analyst – Compound Semiconductor & Emerging Substrates
Monday, September 18, 2023
Innovation of device and 8-Inch wafer as game changers of SiC market
The paper presents the potential direction of leading automotive OEMs development of next generation of SiC based powertrain, along with the innovation of 8-inch platform and massive wafer capacity expansion worldwide. The two major factors could lead to the reformation of SiC eco-system.The paper presents the potential direction of leading automotive OEMs development of next generation of SiC based powertrain, along with the innovation of 8-inch platform and massive wafer capacity expansion worldwide. The two major factors could lead to the reformation of SiC eco-system.