ST & Wolfspeed: A tale of two SiC suppliers

The SiC market is moving fast – with changes among key players and a shift in market focus from materials to devices – altering the business prospects of two SiC pioneers. – an article written by Junko Yoshida for THE OJO-YOSHIDA REPORT, in collaboration with Poshun Chiu from Yole Group.

The contrast between ST and Wolfspeed couldn’t be starker. Did Wolfspeed, focused intently on leading the transition from 6- to 8-inch SiC wafers, underestimate Chinese wafer makers? Or, too busy satisfying multi-year wafer contracts with SiC device vendors such as Infineon and Renesas, did Wolfspeed fail to see that profitability in the business has already moved on from wafers to devices? We pick the Yole Group’s brain to learn what ST has done comparatively better.

STMicroelectronics last week unveiled its plan for a new 8-inch SiC manufacturing facility in Catania, Italy. That site will become an integrated hub for ST’s comprehensive SiC operations, from wafers to testing and packaging devices.

This move is monumental.

Above all, it paves ST’s path to become, over the long run, a genuine leader on the SiC market.

In its announcement last week, ST stated that 8-inch SiC wafer production starting in 2026 will ramp to full capacity by 2033 with up to 15,000 wafers per week. Citing that figure, Poshun Chiu, senior technology & market analyst, semiconductor substrates and materials at Yole Group, said, “That’s the largest [SiC] capacity ever announced. It would enable ST to take more opportunities [in the SiC market] than other peers.”

Second, ST’s latest SiC expansion, backed by the EU’s CHIPS Act, contrasts sharply with Wolfspeed, which has been forced by shareholders to postpone a planned German fab. 

In February 2023, Wolfspeed (Durham, N.C.) unveiled — with German Chancellor Olaf Scholz in attendance — an ambitious plan for its advanced SiC manufacturing facility in Saarland, Germany. Wolfspeed talked about its collaboration within the Important Projects of Common European Interest (IPCEI) for Microelectronics and Communication Technologies framework. Wolfspeed also noted at that time that the facility needed state aid approval from the European Commission.

ST, on the other hand, has become the first company to receive Italian state aid approved by the European Commission to build a 5-billion-euro ($5.4 billion) plant.

Clearly, ST knew how to navigate the EU bureaucracy. The US SiC company faltered under the thumb of shareholders and pressure to meet short-term goals.

In fact, guided by shareholders, Wolfspeed plans to decrease its fiscal 2025 capital expenditure to $1.4 billion from $2 billion, and accelerated the ramp-up in its Mohawk Valley SiC manufacturing fab (Marcy, New York) and the John Palmour Manufacturing Center for Silicon Carbide (Chatham County, North Carolina). Yole Group’s Chiu noted, “It’s all about improving Wolfspeed’s financial metrics.”

… Read the story HERE.

Source: https://ojoyoshidareport.com/