5G is expected to enter commercial operation in 2020, while vehicles become more intelligent, networked and electric, driving the development of SiC and GaN, the third-generation semiconductor materials. TrendForce estimates that the revenue for SiC substrates and GaN substrates will be US$180 million and US$3 million respectively in 2018.
SiC and GaN devices are more resistant to high-voltage operations compared with mainstream Si-based ones. SiC and GaN materials also outperform Si in operations of high-temperature and high-frequency respectively. In SiC and GaN power devices, the sizes of chips are smaller, while the circuit designs are simplified. As the result, modules, components and cooling systems are also smaller in size. The entire vehicles will become more lightweight in this way. In addition, SiC and GaN’s properties of low on-resistance and low switching loss will be key to improving automotive battery life. Therefore, the development of SiC and GaN power devices is closely associated with the advancement of electric vehicles.
However, SiC materials remain in the stage of testing and introduction. In the automotive area, SiC power devices are only applied to race cars now, so SiC-based solutions’ output by area accounts for less than 0.1% of all automotive power devices worldwide, according to TrendForce. Currently, GaN-on-SiC and GaN-on-Si are two mainstream production approaches for GaN power devices. GaN-on-SiC has excellent heat dissipation performance and is suitable for high-frequency operations, making it commonly used in 5G base stations. It is expected that the market of SiC substrates will escalate in the next five years after automobile companies finish the tests and 5G goes into commercial operation in 2020.
The costs of GaN substrates remain high, so the revenue of GaN substrates is much smaller than that of SiC substrates for current stage. However, GaN devices’ resistance to high-frequency conditions makes them a point of focus for technology companies. GaN-on-SiC technology is now used in high-specification products. On the other hand, GaN-on-Si is more cost-effective and becomes the mainstream in GaN power device market, with higher possibility of growth in sectors of power management chips and charging systems for automobiles and smartphones.
The third generation semiconductor materials show market potential due to rapid development of 5G and automotive technology. Manufacturers have been providing foundry services of SiC and GaN devices, cutting into the supply chain where IDMs like Cree, Infineon, Qorvo, etc. used to dominate. For example, TSMC and VIS provide foundry service of GaN-on-Si. WIN Semiconductors focuses on GaN-on-SiC sectors and business opportunities brought by 5G base stations. In addition, X-Fab, Episil Technologies and GCS also provide foundry service of SiC and GaN. The development of foundry services will drive the growth of third-generation semiconductor materials market.