STMicroelectronics, following its EUR 7.5 billion wafer fab project with GlobalFoundries in Crolles, France. is set to invest EUR 5 billion in building a new SiC super semiconductor wafer fab in Catania, Sicily, Italy. The fab in Italy will specialize in producing SiC chips, a pivotal technology for electric vehicles with substantial growth potential, according to French media L’Usine Nouvelle on November 26th,

STMicroelectronics competitively plans to transition to 8-inch wafers starting from 2024. The company will integrate Soitec’s SmartSiC technology to enhance efficiency and reduce carbon emissions. Simultaneously, STMicroelectronics aims to increase capacity, achieve internal manufacturing, and collaborate with Chinese firm Sanan Optoelectronics to raise SiC chip-related revenue from the expected USD 1.2 billion in 2023 to USD 5 billion by 2030.

On June 7th earlier this year, STMicroelectronics and Sanan Optoelectronics announced a joint venture to establish a new 8-inch SiC device fab in Chongqing, China, with an anticipated total investment of USD 3.2 billion.

To ensure the successful implementation of this extensive investment plan, Sanan Optoelectronics said to utilize its self-developed SiC substrate process to construct and operate a new 8-inch SiC substrate fab independently.

TrendForce: over 90% SiC market share by major global players        

According to TrendForce, the SiC industry is currently dominated by 6-inch substrates, holding up to 80% market share, while 8-inch substrates only account for 1%. Transitioning to larger 8-inch substrates is a key strategy for further reducing SiC device costs.

8-inch SiC substrates offer significant cost advantages than 6-inch substrates. The industry’s major players in China, including SEMISiC, Jingsheng Mechanical & Electrical Co., Ltd. (JSG), Summit Crystal, Synlight Semiconductor, KY Semiconductor, and IV-SemiteC, are advancing the development of 8-inch SiC substrates. This shift from the approximately 45% of total production costs associated with substrates is expected to facilitate the broader adoption of SiC devices and create a positive cycle for major companies.

Not only Chinese companies but also international semiconductor giants like Infineon Technologies and Onsemi are actively vying for a share of the market. Infineon has already prepared the first batch of 8-inch wafer samples in its fab and plans to convert them into electronic samples soon, with mass production applications scheduled before 2030. International device companies like Onsemi and ROHM have also outlined development plans for 8-inch SiC wafers.

Currently, major companies hold over 90% of the market share, intensifying competition. A slowdown in progress could provide opportunities for followers. According to TrendForce, the market share of the top 5 SiC power semiconductor players in 2022 was dominated by STMicroelectronics (36.5%), Infineon (17.9%), Wolfspeed (16.3%), Onsemi (11.6%), and ROHM (8.1%), leaving the remaining companies with only 9.6%.

(Image: STMicroelectronics)

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TrendForce research indicates that in 1H23, the utilization rate of 8-inch production capacity primarily benefited from sporadic inventory restocking orders for Driver ICs in the second quarter. Additionally, wafer foundries initiated pricing strategies to encourage clients into early orders, offering solid backup. However, in 2H23, persistent macroeconomic and inventory challenges led to the evaporation of an anticipated demand surge.

Meanwhile, stockpiles in automotive and industrial control segments grew after meeting initial shortages, tempering demand. Under fierce price competition from PMIC leader Texas Instruments (TI), inventory reductions for Fabless and other IDMs were drastically inhibited. With IDMs ushering in output from their new plants and pulling back outsourced orders, this compounded reductions to wafer foundries. This dynamic saw 8-inch production capacity utilization dipping to 50–60% in the second half of the year. Both Tier 1 and Tier 2/3 8-inch wafer foundries saw a more lackluster capacity utilization performance compared to the first half of the year.

Heading into 2024, with the prevailing economic turbulence, the overall semiconductor foundry capacity utilization rate will face challenges in recovery. The 8-inch capacity utilization for 1Q24 is poised to mirror—or potentially dip below—4Q23 figures, revealing a glaring lack of recovery indicators.

However, starting from 2Q24, TrendForce posits that while clarity on end sales remains murky due to overarching economic risks, inventory levels are expected to wane, returning to a healthier equilibrium. The ensuing periodic restocking and the added momentum from orders shifted to Taiwanese foundries (owing to decoupling from China), should keep the 8-inch utilization rate from diving further. The average annual utilization rate for 8-inch wafers in 2024 is pegged around 60–70%. A swift return to yesteryear’s peak capacity seems difficult for now.

Taiwanese and Korean semiconductor foundries face the brunt of order curtailments

A closer look reveals Chinese foundries, such as SMIC and HuaHong Group (primarily HHGrace for 8-inch), exhibiting marginally superior 8-inch utilization rates than their Taiwanese and Korean peers. The proactive pricing approaches of Chinese foundries and China’s push for domestic IC substitution and production are key drivers. However, despite price reduction across foundries in 2H23, a predominantly conservative market outlook from clients, combined with the absence of urgent orders, meant these reductions rendered limited assistance to the 8-inch wafer utilization rate in the latter half of the year.

Panning to 2024, SMIC and HHGrace are forecast to outpace their Taiwanese and Korean counterparts in an 8-inch utilization rate resurgence. HHGrance could even see a stellar rebound, reaching 80–90%. On the Taiwanese front, TSMC grapples with PMIC order pullbacks, predicting an expected drop in 8-inch utilization to below 60% from 4Q23 to 1Q24. UMC and PSMC, in the same span, are gearing up to maintain levels above 50%.

Furthermore, even traditionally resilient Japanese and European IDMs commenced their inventory recalibration in 3Q23, potentially further stalling the recovery timeline for the 8-inch capacity utilization rate. TrendForce insights suggest that, with mounting inventory pressures, Infineon is curtailing orders to external foundries such as UMC and Vanguard. This strategy will likely suppress Vanguard’s 8-inch utilization rate into 1Q24, casting a gloomier shadow than earlier projections.

Korean heavyweight, Samsung, has prioritized its 8-inch production for large-sized Driver ICs, CIS, and smartphone PMICs. However, the persistent softness in consumer demand has prompted their clientele toward a more guarded-order strategy. Furthermore, Chinese CIS patrons, aligning with local manufacturing inclinations, are transitioning toward native foundries. Consequently, Samsung’s 8-inch utilization rate has languished in 2H23, with expectations set at approximately 50% throughout 2024.

Looking at the development of the global SiC (silicon carbide) industry, IDMs in Europe and the United States occupy an absolute leading position, with the United States accounting for more than half of the market share in the substrate material sector. In order to ensure long-term and stable development of the SiC business, major manufacturers have also successively intervened in key upstream substrate materials in an effort to control the supply chain. Therefore, vertical integration has become an important trend in the development of the SiC industry. The global market value of SiC power semiconductors is estimated to be approximately US$1.589 billion in 2022 and will reach US$5.302 billion by 2026, with a CAGR of 35%.

Wolfspeed holds more than half the world’s SiC substrate market share and is first to move to 8-inch wafers

SiC substrates are characterized by difficult growth conditions, arduous processing, and high technical thresholds, which have become a key constraint on downstream production capacity. At present, only a few manufacturers such as Wolfspeed, ROHM, ON Semi, and STM have the ability to independently produce SiC crystals. From the perspective of SiC substrate market share in 2021, the leading players in order of market share are: Wolfspeed at 62%, II-VI at 14%, SiCrystal at 13%, SK Siltron at 5%, and TankeBlue at 4%.

Increasing the number of components on a single wafer is one of the main methods of further reducing the cost of SiC power components, so the industry is fully promoting 8-inch transformation. 8-inch SiC wafers have issues such as difficult material growth, laborious dicing, and losses during dicing. At this stage, yield rate is low. Therefore, 8-inch SiC wafers will not have much impact on the industry in the short term but, in the long run, with breakthroughs in material growth and process yield, the final chip cost of 8-inch wafers will inevitably present great advantages.

SiC MOSFET market highly competitive, STM comes out on top

With the successful application of high-quality 6H-SiC and 4H-SiC epitaxial layer growth technology in the 1990s, the research and development of various SiC power components entered a period of rapid development, leading to their current ubiquity in sectors such as the automotive and industrial fields. From the perspective of competition patterns in the SiC power component market, as Tesla’s first SiC supplier, STM took first place in 2021 with a market share of 41%, Infineon took second place with 22%, followed by Wolfspeed, ROHM, ON Semi and other manufacturers.

TrendForce indicates, from the perspective of SiC MOSFET technology, trench structure’s powerful cost and performance advantages will see it become the mainstream technology in the future. Infineon and ROHM have been working on this a long time and these two companies have successively introduced this structure to the market as core products. STM, Wolfspeed, and On Semi still employ planar structures at this stage but their next generation products will also move to trench structures.

（Image credit: Pixabay）

Although the overall economy is unstable, the use of automotive MCUs is still increasing gradually due to electric and smart vehicle trends. In order to meet market demand, IDMs have strengthened their investment in production resources. There will also be volume and price growth in 2022. Overall market size is estimated to reach US$8.58 billion, with an annual growth rate of 25.7%.

Automotive MCU market dominated by major international IDMs, 32-bit penetration rate will reach 80.1% in 2022

NXP, Renesas, and Infineon account for approximately 70% of global automotive MCU market share. In 2022, NXP will focus on the development of its S32 series and presented a S32M test chip featuring TSMC’s 5nm process, symbolizing a major milestone in the development of automotive chips. Renesas is focusing on its RH850 series, supplemented by the Low Power RL78 to stabilize development. Infineon’s automotive MCU development is focused on its AURIX series which features a self-developed TriCore core and is designed to perform mid-to-high-level automotive system control.

In general, major international IDMs have a complete line of automotive MCUs. With the increasing number of automotive functions, requirements for MCU computing power have advanced. Considering the optimization of major manufacturers’ product portfolios, the penetration rate of 32-Bit MCUs will also increase year by year and is forecast to grow to 80.1% in 2022.

Nuvoton ranks among top ten MCUs producers worldwide, Taiwanese manufacturers’ operations suffer headwinds after tide of shortages recedes

Taiwanese MCU manufacturers are represented by Nuvoton, Holtek, and Sonix. There are other manufacturers such as Generalplus, Nyquest, Hycon, and Megawin but their revenue scale is small and proportion of MCU is low. Overall, only Nuvoton is an IDM with a MCU market share ranked among the top ten in the world and readily available automotive MCU products.

Taiwanese manufacturers mainly focus on mid-to-low-end consumer electronics applications with low barriers to entry. Most of them are fabless manufacturers, meaning the barriers to entry for capital are also low. Therefore, it is difficult to compare their product portfolios with major international manufacturers. After the shortage of semiconductors subsided, operation in 1H22 inevitably encountered headwinds and demand for consumer electronics in 2H22 will continue to be weak, signaling the arrival of a cold winter for the consumer MCU market.

（Image credit: Pixabay）