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.

According to the news from Money UDN, amid a tough semiconductor market, once-stable long-term contracts for silicon wafer makers have turned uncertain. A major Taiwanese foundry seeks price cuts in upcoming contracts from a Japanese supplier. Intense negotiations are ongoing, potentially affecting industry dynamics and pricing strategies due to the Japanese suppliers’ pivotal role in the supply chain.

Market insiders suggest silicon wafer makers may resist price reductions due to their vital role in foundries. Reports hint at foundries’ challenges and the ripple effects on critical materials suppliers.

Globally, Japan’s Shin-Etsu and SUMCO are top silicon wafer suppliers, trailed by Taiwan’s GlobalWafers, Germany’s Siltronic, and South Korea’s SK Siltron. And Taiwan SUMCO joint venture with Formosa Plastics Group as “Formosa Sumco Technology”, and other companies like Wafer Works. With over 30% market share, Shin-Etsu leads, closely followed by SUMCO, combining for around 55% to 60% global share.

Taiwan’s foundries include TSMC, UMC, VIS, and PSMC, among others. TSMC, with a global market share exceeding 50%, holds a leading position in the industry.

Silicon wafers are essential raw materials for semiconductor foundries, integrated device manufacturers (IDMs), and memory manufacturers. Presently, the standard duration for silicon wafer long-term contracts ranges from three to 8 years, specifying annual supply and demand quantities. In the previous semiconductor boom, these long-term contracts often featured escalating prices year by year.

Semiconductor market shifts led to reduced foundry capacity use, heightening tensions with silicon wafer makers’ clients. Delays emerged in the last quarter, leading to agreements between manufacturers and clients. This trend has persisted into the first half of this year. Silicon wafer industry insiders acknowledge slow end-market demand recovery and relatively high client inventories.

Amidst this situation of overflowing inventories, reports indicate that a major Taiwanese silicon wafer foundry is requesting Japanese silicon wafer suppliers to not only agree to further delays in this year’s contracted shipments but also to lower prices for next year. However, no formal agreement has been reached by the silicon wafer manufacturers at this stage.

A juridical person suggests that the negotiations are currently at a deadlock, and the situation might become clearer in the fourth quarter. If the silicon wafer manufacturers eventually concede, they are unlikely to publicly admit it, in order to prevent other clients from seeking similar adjustments and causing wider disruptions.

Market insiders also reveal that the Japanese silicon wafer manufacturers facing price reduction demands are currently operating relatively well and are adopting a firm stance. From the perspective of the foundries, they are hoping for support from their supply chain partners to alleviate the pressure. Normal silicon wafer inventories typically span two to three months, yet certain silicon wafer foundries are already grappling with high inventory levels, particularly for 8-inch wafers, which might persist throughout this year.

(Source: https://money.udn.com/money/story/5612/7366962)

In recent years, China has been aggressively pursuing the build-out of an independent semiconductor supply chain as it attempts to eschew dependence on foreign suppliers. The key to China’s success is whether it can establish domestic suppliers of semiconductor equipment.

Looking at the current state of China’s semiconductor independence, it should be pointed out that Chinese suppliers of semiconductor equipment have been making the greatest progress on the CMP, etching, and cleaning fronts, while lagging behind in terms of deposition, ion implantation, and photolithography.

CMP equipment is used for polishing silicon wafers and metallic/non-metallic thin films. TrendForce estimates that about 26% of all such equipment procured by Chinese foundries in 2020 was sourced from domestic companies. CMP equipment manufactured by Chinese brands can support process technologies as advanced as the 14nm node, which is sufficient for meeting the current demand of Chinese foundries.

An indispensable aspect of silicon or dielectric etch applications, about 24% of all etching equipment procured by Chinese foundries in 2020 was sourced from domestic companies. Chinese-manufactured etching equipment can currently support process technologies as advanced as the 5nm node.

Used for cleaning wafers after the deposition process, CMP process, etching process, and ion implantation process, about 23% of all cleaning equipment procured by Chinese foundries in 2020 was sourced from domestic companies.

Cleaning equipment manufactured by Chinese brands can support process technologies as advanced as the 14nm node. Remarkably, more Chinese companies have been entering this market segment compared to other semiconductor equipment, while some Chinese suppliers are already able to compete with major foreign suppliers in terms of market shares.

Used for PVD, CVD, and ALD processes, about 10% of all deposition equipment procured by Chinese foundries in 2020 was domestically sourced. Chinese-manufactured deposition equipment can support process technologies as advanced as the 14nm node. However, as the technological barrier for manufacturing these products is relatively high, Chinese suppliers are still in the process of catching up to their global competitors in terms of technology. Hence, it remains difficult for Chinese suppliers to continue raising their market shares in the short run.

Likewise, as the technological barrier for manufacturing ion implantation and photolithography equipment is relatively high, equipment from Chinese suppliers is unlikely to support advanced process technologies in the short run despite these suppliers’ aggressive R&D efforts. In terms of self-sufficiency, about 5% and 1% of all ion implantation equipment and photolithography equipment, respectively, procured by Chinese foundries in 2020 was domestically manufactured.

（Cover image source: Unsplash）