The market for third-generation (compound) semiconductors encompasses products based on silicon carbide (SiC) and gallium nitride (GaN). In particular, SiC products account for about 80% of the total market value. As a semiconductor material, SiC is suitable for applications that require high voltages and high current levels. Therefore, the adoption of SiC power devices will further improve the efficiency of electric vehicles and renewable energy systems. According to TrendForce’s latest survey of the market for third-generation semiconductors, chipmakers onsemi and Infineon have respectively formed collaborative relationships with carmakers and developers of energy solutions. With the cooperation among them becoming more visible, TrendForce projects that the value of the global market for SiC power devices will reach US$2.28 billion in 2023, reflecting a YoY growth of 41.4%.
TrendForce points out that the two largest application segments within the market for SiC power devices are electric vehicles and renewable energy. The value of the market for SiC power devices used in electric vehicles came to US$1.09 billion in 2022, comprising around 67.4% of the value of the entire market for SiC power devices in the same year. As for SiC power devices related to renewable energy applications, their market value came to US$210 million in 2022, accounting for around 13.1% of the total. Regarding the collaborations between suppliers for SiC power devices and carmakers, onsemi, and Volkswagen have entered into a strategic agreement under which the former will provide the latter with its EliteSiC 1200V power modules for the main traction inverter. Kia has also adopted the EliteSiC series for its latest electric compact crossover SUV named EV6 GT. Wolfspeed, which is another leading specialist in third-generation semiconductors, has further strengthened its partnership with the major carmaker Mercedes-Benz as well. Both parties have signed an agreement under which Wolfspeed will supply SiC power devices used in the electric vehicles developed by Mercedes-Benz.
In the area of renewable energy, Onsemi has begun collaborating with Ampt in the provisioning of power semiconductor devices for solar photovoltaic and energy storage systems. Specifically, Ampt will be adopting Onsemi’s SiC MOSFET for its DC string optimizers. Likewise, Taiwan-based Delta Electronics has adopted Infineon’s CoolSiC for its bi-directional inverters that can serve as a hybrid three-in-one system for the integration of solar photovoltaics, energy storage, and charging of electric vehicles. US-based hydrogen platform developer Bloom Energy has also selected offerings under the CoolSiC series to further improve the efficiency of its fuel cell system and electrolyzer.
SiC substrate not only accounts for up to 49% of the cost of a SiC power device but also determines the product quality. Currently, Wolfspeed is recognized for having a market share of more than 60% for SiC substrates. Turning to other players, Infineon has recently secured a long-term supply agreement with Resonac (formerly Showa Denko). Under this agreement, Resonac will first supply mostly 6-inch SiC materials to Infineon; and then, Resonac will support Infineon’s transition to 8-inch. Also, STMicroelectronics (ST) has expanded its cooperation with Soitec. Going forward, ST will use Soitec’s SmartSiC technology to manufacture 8-inch SiC substrates. Regarding the growth of the production capacity for SiC substrates, Wolfspeed currently has a fab for producing 8-inch SiC substrates and plans to build another fab for 8-inch SiC power devices in Germany. ZF Group is a joint investor in the planned German fab and will be committing hundreds of millions of US dollars.
Currently, semiconductor companies around the world are highly attentive to the size transition of SiC substrates. With Wolfspeed being the first to activate production capacity for 8-inch SiC substrates, other suppliers will follow suit and vigorously pursue collaborations with the participants in both the upstream and downstream. Hence, TrendForce forecasts that the value of the global market for SiC power devices will climb to around US$5.33 billion in 2026. Electric vehicles and renewable energy will remain the two largest application segments at that time. The value of the market for SiC power devices used in electric vehicles is forecasted to rise to US$3.98 billion in 2026, with the CAGR for the 2023~2026 period coming to around 38%. As for SiC power devices used in renewable energy systems, their market value is forecasted to increase at a CAGR of about 19% for the 2023~2026 period to reach US$410 million.
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