Luo Yiqi, reporter of the 21st Century Economic Report, reports from Guangzhou

In the hot compound semiconductor market, the silicon carbide (SiC) field is setting off a particularly vigorous wave of mergers and acquisitions and production expansion.

The year 2022 will be a year of great splendor. At the beginning of the year, Wolfspeed (formerly Cree), a head-substrate manufacturer, announced the start of the operation of an 8-inch silicon carbide wafer factory, and ST is also actively promoting the research, development and mass production of 8-inch substrates, thus further leading the industry to explore 8-inch substrates.

At the same time, the manufacturers in the silicon carbide industry chain at the head of the company have actively started outward mergers and acquisitions or cooperation, such as the cooperation between Italy France Semiconductor and Soitec in the silicon carbide substrate manufacturing technology. Previously, the manufacturer of GaN, Nanomicro Semiconductor, announced the acquisition of GeneSic, etc.

Gong Ruijiao, an analyst at TrendForce Jibang Consulting, analyzed the 21st Century Economic Report reporter, "There have been a lot of mergers and acquisitions in the silicon carbide industry in recent years. This is mainly due to the desire of major international companies to control the supply chain more completely, especially the competition for upstream materials. Of course, the frequent mergers and acquisitions also reflect the market's recognition of the development potential of silicon carbide."

In contrast, gallium nitride is relatively flat in the field of compound semiconductor materials, which are also highly regarded. Gong Ruijiao believes that this is because the GaN power semiconductor market is still in its infancy, and the small and medium-sized manufacturers focused on it are more active, while the international IDM manufacturers still pay more attention to silicon carbide.

The increasingly vigorous development of electric vehicles is expecting more from the application of silicon carbide, which is also the largest application market of silicon carbide at present. The wide band gap and high temperature and high pressure resistance of silicon carbide make it possible to replace silicon d products in industrial control, photovoltaic, energy storage and other fields.

According to the prediction of Yole, an analyst, silicon-d material devices will still occupy the leading position in the semiconductor market in the future, and it is expected that the market penetration in the future will still exceed 80% (more than 90% in the long term). The penetration rate of the third generation semiconductor materials will increase year by year, and the overall penetration rate is expected to exceed 10% by 2024. The market penetration rate of silicon carbide is expected to be close to 10%, and the penetration rate of silicon nitride will reach 3%.

Actively expand production

If the industry is still thinking about whether it is necessary to rush from 6 inches to 8 inches of silicon carbide substrate, this trend becomes more obvious with the positive steps of the head manufacturers.

Wolfspeed, with the largest share, has a longer R&D time for 8 inches and is actively expanding production. According to the analysis of the 21st Century Economic Report reporter, Wolfspeed has achieved a significant increase in the yield of the production line of 8-inch silicon carbide substrate thanks to the advanced automatic production equipment and long-term investment accumulation. Therefore, China should also actively invest in the layout of 8-inch silicon carbide.

At the previous performance exchange meeting, Wolfspeed executives also pointed out that the demand growth of the power device product line has greatly exceeded expectations. It is expected that 2022 and 2023 will be the inflection point for the adoption of silicon carbide, and the growth will accelerate from 2024. But at present, it is obviously far ahead of schedule, resulting in a mismatch between supply and demand. At present, silicon carbide is widely used in electric vehicles, and a small amount is also introduced in industrial and RF basic applications.

In the face of such rapid growth in demand, actively expanding production became one of the key words of the head manufacturers in that year.

At present, Wolfspeed dominates the market with 60% of the silicon carbide substrate, but with the latecomers actively participating in the competition, this pattern may have room for change. For example, ST actively promoted the 8-inch wafer. At the end of 2022, it also announced to cooperate with Soitec, a silicon carbide wafer head company, to introduce wafer manufacturing technology; II - VI (renamed Coherent) and Roma are also actively expanding their capacity. In the field of devices, Infineon, Ansemy and other leading manufacturers also proposed a substantial expansion plan at the beginning of the year.

Gong Ruijiao believes that in the short term, Wolfspeed will continue to lead the development of silicon carbide substrate market. However, it is worth noting that with the rapid follow-up of other manufacturers and the diversified development of material preparation technology, the future market pattern is still full of variables.

In response to competitors' problems, Wolfspeed previously said that most of its silicon carbide customers have plans to try to develop their own substrates, which stems from the prediction that the silicon carbide market will be in short supply in the next decade.

The strong demand meets the positive expansion of production, so we should not worry about overcapacity in the short term. Prior to this, senior executives of Ansemy said publicly that it is expected that the silicon carbide market will remain relatively scarce in 5-10 years, which is also the driving force for the company to continue to expand its capacity. Wolfspeed also believes that the demand obviously exceeds the supply. At present, the silicon-d semiconductor industry is in a cyclical recession, and silicon carbide has a long-term development prospect.

Gong Ruijiao pointed out to the reporter that from the perspective of downstream demand, driven by the new energy vehicle and industrial market, the silicon carbide industry will still maintain a tight capacity situation in the next three to five years, so there is no need to worry about overcapacity in the short term.

Industrial chain aggregation

It is not only the manufacturers' own capacity expansion, but also the silicon carbide industry chain s have been actively expanding their capacity in recent years.

Ansemy is one of the manufacturers that pay special attention to silicon carbide. At the end of 2021, after its acquisition of GTAT, a silicon carbide producer, it has achieved the capability coverage of the entire industrial chain from silicon carbide substrate to packaging.

Soochow Securities pointed out that, as Ansemy changed its strategy of all in silicon carbide, actively expanded production and vertically integrated the industrial chain to cover the full manufacturing of the third generation of semiconductors, it is estimated that Ansemy is expected to achieve more than 20% market share in the global silicon carbide device market in 2024-2025.

According to Yole's statistics, Italy and France Semiconductor will take the lead in silicon carbide devices in 2021 with 37% market share, followed by Infineon, Wolfspeed and Roma, and Ansemy with 7% market share at that time, so the agency believes that its ranking will continue to rise.

The cooperation between the industrial chains has become more frequent. For example, the cooperation between ST and Soarchitect, Coherent and Infineon have signed a silicon carbide wafer supply agreement; Hon Hai Group invested in Shengxin Materials and deepened the layout of silicon carbide substrate.

As a relatively "young" field in the semiconductor industry, silicon carbide is recognized as a semiconductor material with relatively small difference between domestic and overseas, so the domestic industry chain is also actively developing.

According to the incomplete statistics of the compound semiconductor market, more than 20 new projects/signed silicon carbide projects will be established in 2022, with a total investment of more than 47.6 billion, including 6 projects with an investment of more than 5 billion.

Guangdong has also formed certain characteristics of industrial aggregation and industry-university-research age in the field of silicon carbide. Such as the cooperation between Nansha Wafer and Shandong University, the cooperation between China Ga Semiconductor and the Research Center of Wide Bandgap Semiconductor of Peking University, etc. Guangzhou Nansha has gathered many silicon carbide industry chain manufacturers such as Core Yueneng, Core Juneng, Nansha Wafer, and Lianjing.

Elvis Hsu, general manager of the semiconductor business unit of CINNO Research, pointed out to the reporter of the 21st Century Economic Report that compared with silicon-d MOSFETs, SiC MOSFETs have the advantages of low resistance, low loss, high temperature resistance, high voltage resistance, especially above 1200V, faster switching speed and smaller chip area. It has strong advantages over silicon-d MOSFETs in motor drive, on-board charging, power conversion and charging systems. The main application fields of silicon carbide power devices include electric vehicles, power supply, photovoltaic, and aerospace and military industries. China is the largest electric vehicle market in the world, and has become the main driving force for the growth of the SiC device market. With the expansion of SiC capacity, the cost has been effectively reduced, which is bound to accelerate the penetration of new energy vehicles. Domestic companies such as Shandong Tianyue Advanced, China Resources Micro, San'an Optoelectronics, and Yangjie Technology are expected to usher in the sweet spot of domestic application development.