The SiC market has been very active lately, with constant news coming from device suppliers and car makers. And there seems to be an ongoing tug-of-war between supply and demand.

Toshiba announced in April the groundbreaking of its power semiconductor fab for SiC in Ishikawa Prefecture, with the first stage beginning in the 2024 fiscal year. This news echoes earlier reports from Japanese media that Toshiba is strengthening the vertical integration throughout SiC equipment, wafers, and devices, and planning to increase the production by three times in 2024 and 10 times by 2026.

Meanwhile, over the past two years, leading companies in the Europe and the US such as Infineon and ST have also accelerated M&A as well as internal expansion for SiC production devices at an unprecedented pace, aiming to expand their SiC-related businesses and maintain their core competitiveness in the market.

Despite aggressive demand-driven expansion plans, the unexpected announcement from Tesla in mid-March that it plans to reduce overall SiC usage by 75% in the next generation of electric vehicle platforms has sparked various speculations in the industry. This move was made without compromising the performance and efficiency of the cars and represents one of the few specific details that Tesla has revealed about its new car plans.

Now here is the question – will the popularity of SiC be a genuine trend, or merely a passing fad that could lead to a potential bubble in the market?

SiC or Si-based solutions?

Compared to IGBT and MOSFET, the dominant technologies in power semiconductor, SiC offers stronger advantages such as low resistance, high temperature and high voltage tolerance that can overcome the technical bottlenecks of EVs by improving battery efficiency and solving component heat dissipation issues. SiC can also make chip design sizes smaller, which means more flexibility in vehicle design.

These advantages have made SiC the most sought-after technology. According to TrendForce, the SiC power device market is expected to grow at a CAGR of 35% to reach $5.33 billion annually from 2022 to 2026, driven by mainstream applications such as electric vehicles and renewable energy.

There is a long-standing debate among the industry about whether SiC will replace IGBTs entirely. What we believe is that SiC may not completely replace IGBTs considering their distinct targeted use scenarios.

In terms of use cases, SiC is particularly suitable for high-frequency, high-voltage applications, especially in the field of new energy vehicles. Traditional Si-based IGBT chips have reached the physical limit in high-voltage fast charging models, making SiC more favorable for new energy vehicles.

However, SiC transistors are expensive due to complex production processes, slow crystal growth, and difficult cutting. Unlike silicon, which can be pulled quickly, SiC crystals grow at a slow rate of 0.2-1mm/hour and are prone to cracking during the cutting process due to their high hardness and brittleness, leading to hundreds of hours of cutting time.

Additionally, SiC transistors also have some drawbacks such as vulnerability to damage and temperature sensitivity, which makes them unsuitable for low-cost and low-power applications.

IGBT, on the contrary, is preferred over SiC in such a field because it is more cost-effective, reliable, and has better capacitance and surge capability for high-power and high-current applications. In certain scenarios, such as DC-DC charging piles, IGBT is irreplaceable due to its cost advantage and suitability.

Could a Hybrid Solution be the Answer?

The premise above can help to explain Tesla’s conflicting decision to cut back on SiC usage.

Tesla’s reluctance to fully adopt SiC technology is mainly due to concerns about reliability and supply chain stability, as evidenced by a mass recall of Model 3 due to issues with SiC components in the rear electric motor inverter.

In addition, the shortage of substrate materials is another challenge facing the SiC industry as a whole, with major manufacturers such as Wolfspeed, Infineon, and ST ramping up production capacity to address the issue. As a result, Tesla is considering alternative ways to mitigate the risks associated with supply chain constraints.

Despite these challenges, SiC remains a promising trend for the EV industry. Even Tesla recognizes its enormous potential commercial value.

In terms of technological innovations, Tesla’s next-generation EVs may feature a novel packaging design for the primary inverter, utilizing a hybrid SiC/Si IGBT packaging approach that leverages the unique strengths of both technologies while avoiding potential pitfalls. This technological advancement poses certain difficulties, but the groundbreaking innovation at the engineering design level is definitely something to look forward to.

Read more:

• Chinese Players Rally for Demand Surge in MOSFET, IGBT, and SiC
• The M&A battle for SiC: Who’s the Top Acquirers?

(Photo credit: Tesla)

Tesla recently announced that its next-generation EV platform will reflect a 75% reduction in SiC components, though this reduction will be made without compromising vehicle performance and safety. This announcement is one of the very few specific details that Tesla has provided to the public about its plan for the development of its future vehicle models. Therefore, it has also trigger a variety of speculations across the automotive industry. According to TrendForce’s investigation, Tesla does not appear to have much confidence in the stability of the supply chain for SiC components. In the past few years, Tesla has been forced to initiate several recalls for the Model 3. One official reason given for the recalls was that the inverters of some of the Model 3 had power semiconductor components with minor manufacturing differences. As a result, these inverters could malfunction after a period of operation and would not able to perform the regular task of current control. This explanation directly points to a quality issue with the SiC components that Tesla has procured for its vehicles.

Additionally, a production capacity crunch for substrates has been the most significant challenge in the development of the market for SiC components. The major suppliers for SiC components and SiC substrates such as Wolfspeed, Infineon, and STMicroelectronics are currently adding a lot more production capacity. At the same time, Tesla is proceeding with the strategy of diversifying its suppliers for SiC components in order to minimize the risk of disruptions in the supply chain.

SiC components are certainly a key category of automotive electronic components that EV manufacturers like Tesla are going to consider when building their future vehicle models. Therefore, in the context of technological advancements, TrendForce believes that Tesla could adopt a hybrid SiC-Si IGBT package for the inverter of its next-generation EV platform. However, switching to such solution will entail disruptive innovations at the engineering and design levels, so this transition will raise many challenges. Also, regarding SiC MOSFETs that have been a critical part of today’s EVs, TrendForce anticipates that their mainstream structural design will transition from planar to trench. Currently, Infineon, ROHM, and BOSCH are the main suppliers for trench SiC MOSFETs.

On the whole, the hybrid SiC-Si IGBT package and trench SiC MOSFETs are technologies that can substantially reduce the total cost of SiC components for a vehicle. They also reduce the complexity and cost of an entire vehicle platform. These benefits, in turn, can help raise the penetration rate of SiC components in the low-end and midrange segments of the EV market. On the other hand, the widening adoption of SiC components could affect the market share of Si IGBTs.

In the market for automotive SiC components, Tesla has been acting as a major indicator of demand and product development trends. Therefore, the semiconductor industry has been paying close attention to this carmaker’s activities. Since Tesla has so far given very few details about its next-generation EV platform, TrendForce says more observations are needed to determine the reasons behind the reduction in SiC content.

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）

At present, the materials with the most development potential are Wide Band Gap (WBG) semiconductors with high power and high frequency characteristics, including silicon carbide (SiC) and gallium nitride (GaN), which are mainly used in electric vehicles (EV) and the fast charging battery market. TrendForce research estimates, the output value of third generation power semiconductors will grow from US$980 million in 2021 to US$4.71 billion in 2025, with a CAGR of 48%.

SiC is suitable for high-power applications, such as energy storage, wind power, solar energy, EVs, new energy vehicles (NEV) and other industries that utilize highly demanding battery systems. Among these industries, EVs have attracted a great deal of attention from the market. However, most of the power semiconductors used in EVs currently on the market are Si base materials, such as Si IGBT and Si MOSFET. However, as EV battery power systems gradually develop to voltage levels greater than 800V, compared with Si, SiC will produce better performance in high-voltage systems. SiC is expected to gradually replace part of the Si base design, greatly improve vehicle performance, and optimize vehicle architecture. The SiC power semiconductor market is estimated to reach US$3.39 billion by 2025.

GaN is suitable for high-frequency applications, including communication devices and fast charging for mobile phones, tablets, and laptops. Compared with traditional fast charging, GaN fast charging has higher power density, so charging speed is faster within a smaller package that is easier to carry. These advantages have proven attractive to many OEMs and ODMs and several have started rapidly developing this material. The GaN power semiconductor market is estimated to reach US$1.32 billion by 2025.

TrendForce emphasizes that third generation power semiconductor substrates are more difficult to manufacture and more expensive compared to traditional Si bases. Taking advantage of the current development of major substrate suppliers, companies including Wolfspeed, II-VI, and Qromis successively expanded their production capacity and will mass-produce 8-inch substrates in the 2H22. Output value of third generation power semiconductors is estimated to have room for continued growth in the next few years.

Owing to the EV market’s substantial demand for longer driving ranges and shorter charging times, automakers’ race towards high-voltage EV platforms has noticeably intensified, with various major automakers gradually releasing models featuring 800V charging architectures, such as the Porsche Taycan, Audi Q6 e-tron, and Hyundai Ioniq 5. According to TrendForce’s latest investigations, demand from the global automotive market for 6-inch SiC wafers is expected to reach 1.69 million units in 2025 thanks to the rising penetration rate of EVs and the trend towards high-voltage 800V EV architecture.

The revolutionary arrival of the 800V EV charging architecture will bring about a total replacement of Si IGBT modules with SiC power devices, which will become a standard component in mainstream EV VFDs (variable frequency drives). As such, major automotive component suppliers generally favor SiC components. In particular, Tier 1 supplier Delphi has already begun mass producing 800V SiC inverters, while others such as BorgWarner, ZF, and Vitesco are also making rapid progress with their respective solutions.

At the moment, EVs have become a core application of SiC power devices. For instance, SiC usage in OBC (on board chargers) and DC-to-DC converters has been relatively mature, whereas the mass production of SiC-based VFDs has yet to reach a large scale. Power semiconductor suppliers including STM, Infineon, Wolfspeed, and Rohm have started collaborating with Tier 1 suppliers and automakers in order to accelerate SiC deployment in automotive applications.

It should be pointed out that the upstream supply of SiC substrate materials will become the primary bottleneck of SiC power device production, since SiC substrates involve complex manufacturing processes, high technical barriers to entry, and slow epitaxial growth. The vast majority of n-Type SiC substrates used for power semiconductor devices are 6 inches in diameter. Although major IDMs such as Wolfspeed have been making good progress in 8-inch SiC wafer development, more time is required for not only raising yield rate, but also transitioning power semiconductor fabs from 6-inch production lines to 8-inch production lines. Hence, 6-inch SiC substrates will likely remain the mainstream for at least five more years. On the other hand, with the EV market undergoing an explosive growth and SiC power devices seeing increased adoption in automotive applications, SiC costs will in turn directly determine the pace of 800V charging architecture deployment in EVs.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com