According to TechNews’ report, Delta Electronics has held its third-quarter earnings conference yesterday, announcing at the beginning that it will spin off its EV business next year.

In the future, the company’s business will be divided into four major categories: power electronics, transportation, automation, and infrastructure, highlighting its commitment to the EV sector. Delta’s Chairman, Yancey Hai, pointed out that although the electric vehicle industry is currently facing some headwinds, the overall trend is still positive.

Delta Electronics reported consolidated revenues of NT$107.795 billion for the third quarter, representing a 7.2% increase from the previous quarter and a 1.45% increase year-on-year, marking a historic high for a single quarter. The accumulated consolidated revenues for the first three quarters reached NT$301.206 billion, an 8% year-on-year growth, setting a new high for the same period in previous years.

Delta Electronics’ gross margin for the third quarter was 29.57%, a slight decrease from the 30.29% of the same period last year, which had a high base effect. The average gross margin for the first three quarters was 28.8%, slightly lower than the 29.1% of the same period last year.

Looking ahead to the fourth quarter, there is considerable attention on AI and EV developments, especially in light of recent events such as the strikes by the United Auto Workers (UAW) in the United States and concerns from American EV manufacturer Tesla and battery maker Panasonic about EV sales.

However, Delta Electronics’ Chairman Yancey Hai mentioned that while there is currently a lot of noise in the EV market, with Tesla experiencing slower sales and price reductions and the UAW strikes, the long-term outlook for EVs remains positive. Most countries have set schedules for phasing out traditional fossil-fuel vehicles, indicating a consistent trend for the future.

Yancey Hai mentioned that the primary reason for slower EV sales is the higher price of EVs compared to traditional fossil-fuel vehicles. EVs also cannot rely solely on government subsidies to boost sales. Additionally, there is still room for price reductions in the EV market. EVs have simpler construction compared to traditional vehicles, but the current high cost of batteries is a limiting factor.

In terms of orders, there will still be many new vehicle models introduced in the future. The strikes by American car manufacturers will have minimal impact on Delta Electronics. While the company may not double its growth this year, it is expected to see at least an 80% growth.

Looking ahead to the future and considering fourth-quarter revenue, CEO Ping Cheng stated that the fourth quarter will be similar to the third quarter, with improvements expected in various aspects next year compared to this year. However, there are no significant signs of a rebound in consumer electronics products and Chinese automation this year. Changes will be limited.

Consumer electronics products are awaiting the depletion of customer inventory, and next year is expected to be better than this year. As for Chinese automation, it has been impacted by the US-China trade tensions, reduced manufacturing investments, and China’s economic development. Industrial automation business also hasn’t shown growth this year.

Regarding the booming AI sector, Ping Cheng pointed out that there is currently a global arms race in AI, with the development of large AI data centers. Delta has already witnessed a significant demand in this area.

However, since AI-related processes are different from traditional servers, there is still work to be done in terms of setup. Regarding cooling, Delta has been developing air cooling, water cooling, and immersion cooling solutions. As the power density of AI continues to increase in the future, the demand for cooling will also rise.

Hai stated that the current revenue contribution from EVs is around 12%, and they expect it to increase further next year. They’re expecting the EV growth to maintain 40% to 50% momentum in the coming year. As for AI servers, it currently accounts for about 15% of the power segment, and they expect its growth to be faster in the future.

(Photo credit: Delta’s Facebook)

Xiaomi’s subsidiary, Shanghai Xiaomi Jingming Technology Co., Ltd., was established recently with a registered capital of 10 million yuan (RMB). The company’s scope of operations includes car sales, car wash services, vehicle repair and maintenance, small and micro passenger car rental services, chauffeur services, and internet sales.

The establishment of this new company is closely tied to Xiaomi’s foray into the electric vehicle (EV) industry.

On March 30, 2021, during a Xiaomi product launch event, the company’s founder, Lei Jun, announced Xiaomi’s entry into the smart electric vehicle sector. Following this announcement, Xiaomi formally approved the EV project and committed to setting up a wholly-owned subsidiary to oversee its EV business. Xiaomi allocated an initial investment of 10 billion RMB for this venture, with a projected investment of 10 billion USD over the next decade.

In a recent development, Xiaomi’s Chairman, Lei Jun, expressed his optimism about Xiaomi’s electric vehicle project on October 25, stating that the project is progressing smoothly.

Sources familiar with the matter disclosed that Xiaomi’s electric vehicle project has multiple platform generations in development, with the first platform set for release in 2024 and the second in 2025.

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•  [News] Xiaomi EV Reportedly Finalizes Battery Supplier List, CALB and CATL Chosen
• [News] Xiaomi Begins Trial Production of 50 Prototype Cars per Week

(Photo credit: Xiaomi’s Facebook)

After a grueling six-week standoff, the United Auto Workers (UAW) has reached a groundbreaking labor agreement with General Motors (GM). This news comes after resolving disputes with Ford and Stellantis, the parent company of Chrysler, signaling a turning point in the largest auto industry strike in recent history.

According to reports from Reuters and The Wall Street Journal, the UAW and General Motors reached a preliminary agreement on October 30, officially putting an end to the six-week-long strike. It is reported that the UAW has successfully secured wage increases from General Motors similar to those obtained from Ford and Stellantis.

Over a four-year period, the average wage increase reaches 25%, and retirement benefits receive additional enhancements. When including other allowances, the maximum wage increase reaches 33%. The details are subject to approval by union members’ vote.

In response to the agreement, GM’s CEO, Barbara, stated that the new terms would enable the company to continue investing while offering well-compensated employment. She eagerly anticipates the return of all employees to their workstations.

The UAW initiated localized strikes against the three automotive giants – GM, Ford, and Stellantis – starting on September 15. These strikes grew in scale over time, primarily targeting larger and more profitable factories to exert pressure on the management. At Its Peak, Nearly 50,000 People Joined the Strike, with President Biden Personally Expressing Support by Visiting the Strike Sites.

The lengthy strike has finally concluded, bringing a sigh of relief to automakers. However, it has had a significant financial impact, with both General Motors and Ford canceling their annual earnings forecasts. General Motors estimates the strike resulted in approximately $200 million in losses each week.

Analysts anticipate that the new labor agreement will substantially increase production costs for the big three automakers, potentially undermining their competitiveness against union-free electric vehicle manufacturers like Tesla and foreign brands such as Toyota.

Notably, the union has secured greater influence over capital decisions during negotiations, including the power to initiate strikes when a manufacturer contemplates plant closures.

While the three major automakers currently express their intent to keep existing factories operational during their transition towards electric vehicles, contractual constraints may force them to continue running unprofitable facilities in times of economic downturn or declining sales.

Read more

• [News] Ford Shifts EV Investment Focus Amidst Fierce Price Competition

(Photo credit: GM’s facebook)

Once considered a driving force behind economic growth, the electric vehicle (EV) market is facing a reality check as consumers are becoming more practical about their needs due to rising inflation and high-interest rates. Automakers acknowledge that in times of inflation, electric vehicles won’t be on consumers’ radar in the coming years unless their prices are lowered.

In the third quarter, the U.S. saw a surge in EV sales, breaking the 313,000 mark, almost a 50% increase from the same period the previous year. The EV market share reached an all-time high of 7.9%.

However, this growth may be reaching its peak as major automakers are now either postponing their electric vehicle sales targets and production plans or resorting to price reductions.

For instance, Ford has extended the annual production target for electric vehicles to 600,000 units by one year, abandoned the goal of producing 2 million electric vehicles by 2026, and temporarily halted a $12 billion investment in EV projects.

General Motors has also abandoned its sales targets, and Honda has given up on its plans to jointly develop electric vehicles priced below $30,000 with General Motors. Tesla has postponed its super factory project in Mexico.

More manufacturers are resorting to price reductions, including Mercedes-Benz, Tesla, and Ford’s electric trucks, all of which are offering significant discounts.

Price vs. Affordability

Consumers are primarily concerned with the price difference between EVs and gasoline vehicles. In the U.S., most compact electric SUVs are priced at around $52,000, while similar gasoline SUVs cost only about $34,000.

According to Ford’s CEO, in the EV industry, exceptional products alone are no longer sufficient; they must also be cost-competitive. Elon Musk also noted that the high-interest-rate environment is unfavorable for market demand, and making products more affordable is essential to encourage people to make purchases.

However, even with price reductions and discounts, it seems that buyers remain unimpressed. U.S. dealers have observed that the next wave of buyers, unlike those who made impulsive purchases in the past couple of years, are now more focused on practical factors such as cost, infrastructure challenges, and lifestyle impediments.

Practical Considerations

Market analysts suggest that over the past decade of low-interest rates, consumers have increased their spending. However, as interest rates rise, consumers now find the need to be more frugal.

The price of EVs has gone beyond the affordability range of many consumers. The current high-interest-rate environment is also unfavorable for convincing consumers to explore immature automotive technologies.

A survey found that aside from price, consumers still worry about range anxiety and the lack of charging infrastructure. Up to 77% of respondents said these were the most pressing issues when considering EVs. Consumers are less likely to consider immature products when their budgets are tight.

The U.S. government aims to have half of all new vehicles sold be zero-emission vehicles by 2030. Just a few years ago, policymakers believed that Americans would adopt EVs without needing much persuasion. However, this optimism now appears to be overly idealistic.

For now, General Motors, Ford, and even Tesla are deciding to hold onto their cash reserves and redeploy them when the economic situation stabilizes. Toyota Chairman Akio Toyoda, who has consistently argued that pure EVs are not the only solution, should be feeling vindicated as he stated at the recent Tokyo Motor Show, saying that “People are finally seeing reality.”

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• [News] Fisker Responds to EV Market Challenges with Pricing Adjustments
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(Photo credit: Pixabay)

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:

• April 2023: Successfully completed the 8-inch SiC pilot line.
• June 2023: Achieved an average crystal growth yield of over 50% in the 8-inch SiC pilot line with crystal thickness exceeding 15mm.
• September 2023: Successfully launched the 8-inch SiC substrate processing workshop.

IV-Semitec:

• May 2023: Grew 8-inch n-type silicon carbide ingots with a thickness of 27 millimeters.
• September 2023: Signed a strategic cooperation agreement with Spectrum Semiconductor and Gietsic for the joint development of SiC-related products.
• October 2023: Commenced the construction of the pilot line for SiC substrates, with an annual production capacity of 600,000 pieces of 6-8 inch SiC substrates.

Summit Crystal:

• June 2023: Opened the Jinan’s Base with a planned production capacity of 500,000 pieces. It aims to reach full production by 2025, with an expected output value exceeding 5 billion RMB.
• August 2023: Cooperated with Shangdong University, successfully manufactured 8-inch SiC wafers the threading screw dislocation (TSD) density was 0.55 cm^-2, and the basal plane dislocation (BPD) density was 202 cm^-2.

Hoshine Silicon:

• May 2023: Successfully achieved the development and mass production of 8-inch silicon carbide substrates.
• October 2023: 20,000 SiC substrates passed acceptance inspection, demonstrating the capability for mass production.

Synlight:

• September 2021: Launched the single crystal silicon carbide growth project with plans to achieve an annual production capacity of 100,000 pieces upon reaching full production.
• April 2023: Successfully developed 8-inch silicon carbide crystal samples and plans to start small-scale production by the end of the year.

TankeBlue:

• January 2023: Successfully prepared 4H-SiC single crystals with a diameter of 209 mm using the physical vapor transport (PVT) method and produced standard 8-inch SiC single crystal substrates.
• May 2023: Signed a supply agreement with Infineon and started supplying silicon carbide materials.
• August 2023: Began construction of the second-phase expansion project, planning to increase capacity by 160,000 pieces.

JSG:

• June 2023: Successfully developed 8-inch single-wafer silicon carbide epitaxial growth equipment compatible with 6 and 8 inch silicon carbide epitaxial production.
• October 2023: Achieved independent development and commissioning of 8-inch single-wafer silicon carbide epitaxial growth equipment with thickness uniformity within 1.5% and dopant uniformity within 4%.

SanAn Optoelectronics:

• Established a joint venture with STMicroelectronics to build an 8-inch silicon carbide device manufacturing plant, which is expected to start production in the fourth quarter of 2025.
• September 2023: Announced the 8-inch silicon carbide substrate with a production capacity of 12,000 pieces per month, and silicon-based gallium nitride capacity of 2,000 pieces per month.
• October 2023: Started small-scale production and sampling of 8-inch silicon carbide substrates using low-cost technology with low defect density.

SICC:

• May 2023: Signed a new substrate and ingot supply agreement with Infineon, planning to transition to 8-inch silicon carbide wafers.
• June 2023: Successfully prepared low-defect 8-inch silicon carbide crystals with a thickness exceeding 60mm.