ST joins SiC vertical integration race

An article by Junko Yoshida from The Ojo & Yoshida Report, in collaboration with Ezgi Dogmus and Poshun Chiu, from Yole Intelligence, part of Yole Group – Every SiC device supplier wants to control everything from SiC substrate to device manufacturing. Who’s doing what and where?

What’s at stake:

Backed by various kinds of state aid, the SiC industry is booming. Key SiC device suppliers are regularly announcing production expansions plans. Can SiC device suppliers acquire enough wafers to meet market demand, or will they continue sourcing substrates from competitors?
In the fast-growing silicon carbide (SiC) market, vertical integration is the dominant trend. In sharp contrast to the conventional semiconductor business model, where a fabless or “fab-lite” model is the norm, every compound semiconductor supplier aspires to become an integrated device manufacturer (IDM).
ST Microelectronics is no exception.
ST, a leading SiC device supplier for the automotive and industrial markets, announced it will build an integrated SiC substrate manufacturing facility in Italy. Construction will take place at Catania site where the company is already manufacturing SiC devices. The goal is to control everything from SiC substrate to device manufacturing.
ST’s five-year, €730 million investment in the SiC wafer facility includes financial  support from the Italian government, which will chip in €292.5 million from its National Recovery and Resilience Plan. The Italian measure was approved by the European Commission on Wednesday (Oct. 5).

Thus far, ST has only dabbled in SiC wafer manufacturing.
The company has been considering the IDM model since 2019 when it acquired Swedish SiC substrate supplier Norstel. However, Norstel’s capacity in Sweden is limited, and ST has relied on a long-term SiC wafer supply agreement with Wolfspeed, a SiC device competitor that provides ST with 150mm SiC bare and epitaxial wafers.

ST’s new SiC wafer facility in Catania “will secure the internal SiC material supply, which is considered critical in SiC business,” said Ezgi Dogmus, a team lead analyst in compound semiconductor and emerging substrates at Yole Intelligence. This enables ST to reach 40% internal substrate sourcing by 2024, she added.

SiC IDM landscape

ST stressed this “will be a first of a kind in Europe” for volume production of 150mm SiC epitaxial substrates, integrating all steps in the production flow. It noted it has a plan is to develop 200mm wafers, but stopped short of saying when.

ST is certainly not the only company with big SiC plans.

Indeed, power SiC today is among the most vibrant segments of the semiconductor industry. “Hardly a week goes by without groundbreaking news,” Dogmus said. In addition to ST, key SiC players including Wolfspeed, Rohm, Infineon Technologies and Onsemi, are building up internal capacity to ensure the supply.