Silicon Carbide Semiconductor Market Dynamics

Curious about silicon carbide?

Silicon carbide (SiC), a compound of carbon and silicon, is widely recognized as one of the wide-bandgap semiconductor materials, commonly referred to as third-generation semiconductor materials.

Semiconductor materials typically encompass elemental semiconductors like silicon and germanium, along with compound semiconductors such as gallium arsenide, silicon carbide, and gallium nitride. Third-generation semiconductor materials, exemplified by silicon carbide and gallium nitride, possess wide bandgap characteristics. Compared to the first two generations of semiconductor materials, third-generation materials feature a wider bandgap, offering advantages such as high breakdown electric field, high thermal conductivity, high electron saturation velocity, and strong radiation resistance. Consequently, devices fabricated using third-generation semiconductor materials can operate reliably at higher temperatures, suitable for high-voltage and high-frequency scenarios, and achieve superior operational capabilities with reduced energy consumption. In applications spanning from new energy vehicles to new energy generation, rail transportation, aerospace, and defense industries, third-generation semiconductor materials offer irreplaceable advantages.

The wide-bandgap semiconductor industry is experiencing rapid development. Silicon carbide material itself possesses excellent physical properties and is continually penetrating downstream application areas. The global trends of energy electrification and decarbonization are clear, with the third-generation semiconductor industry maintaining strong momentum in 2023. Serving as a cornerstone of the third-generation semiconductor industry, silicon carbide substrate material is entering a strategic opportunity period, driven by demand from end-users such as electric vehicles, photovoltaic new energy, energy storage, and charging piles, as well as the accelerated promotion of the 800V high-voltage platform for electric vehicles. Major countries worldwide are intensifying their strategic layout in the silicon carbide semiconductor field. In 2023, there was strong demand in the international market for high-quality conductive silicon carbide substrates, with end applications achieving large-scale deployment in the new energy vehicle industry and expanding into other fields.

Numerous institutions have made optimistic predictions about the silicon carbide semiconductor market, as follows:

1. According to Yole's data, the market size of silicon carbide devices was $1.97 billion in 2022, with the market size of conductive silicon carbide power devices reaching $1.79 billion. It is expected that by 2028, the market size of conductive silicon carbide power devices will reach $8.69 billion, with a compound annual growth rate of 30.12%.

2. According to IHS data, driven by the huge demand from the new energy vehicle industry and the increasing requirements for efficiency and power consumption in fields such as photovoltaics, wind power, and charging piles, it is expected that by 2027, the market size of silicon carbide power devices will exceed $10 billion, with a compound annual growth rate of nearly 40% from 2018 to 2027.

3. A report from Japan's authoritative industry research institution, Fuji Economic, pointed out that driven by electric vehicles, power equipment, and energy sectors, the demand for SiC power devices remains strong. By 2030, the SiC power device market is expected to reach nearly $15 billion, accounting for about 24% of the overall power device market. By 2035, it is expected to exceed $20 billion, accounting for over 40% of the overall power device market.

4. According to EVTank's data, global sales of new energy vehicles reached 14.65 million units in 2023, a year-on-year increase of 35.4%. Looking ahead, EVTank predicts that global sales of new energy vehicles will reach 18.30 million units in 2024 and 47.00 million units in 2030. Benefiting from the continuous advancement of automotive electrification, SiC power electronic devices under the 800V platform architecture have witnessed significant demand growth. More and more semiconductor device manufacturers are accelerating their layout in the silicon carbide industry chain. Globally renowned tier1 manufacturers such as Infineon, Bosch, ON Semiconductor, and STMicroelectronics have increased their investments in the silicon carbide industry chain. The penetration rate of silicon carbide in new energy vehicles has significantly increased.

These optimistic predictions reflect the development potential of the silicon carbide market. Leading companies such as Wolfspeed have increased capital expenditure to build production capacity or upgrade technological iterations. The continuous stable release of silicon carbide market capacity, the coordinated development of the upstream and downstream industry chains, and the core technological competitiveness of silicon carbide manufacturers will be the focus of the future development of the global wide-bandgap semiconductor industry. The demand for reducing the cost of silicon carbide devices drives the development of larger crystal sizes, higher-quality substrates, and lower manufacturing costs. In the process of substrate preparation, continuous improvement in crystal quality and multidimensional management of substrate quality are required to ensure the continuous supply of high-quality substrate products to customers. As industries such as electric vehicles, charging piles, new energy generation, and energy storage continue to develop, the performance of semiconductor devices also needs to be continuously improved. On the one hand, the advancement toward 8-inch silicon carbide products will continue, while on the other hand, 6-inch silicon carbide products will still develop for a long time. Currently, having large-scale production capacity and effective capacity remains a major focus in the industry. Due to the significant difficulty and long production cycle of silicon carbide substrate material preparation, the industry's short-term attention is still focused on the demand for and stable supply capacity of high-quality substrates such as automotive-grade.

Despite the considerable development potential of the silicon carbide market, certain risks exist:

1. High Cost Challenge: The production cost of silicon carbide remains relatively high, especially compared to traditional silicon-based devices. This may restrict its widespread adoption in some application areas, particularly in cost-sensitive markets.

2. Technological Barriers: Despite its many advantages, the fabrication and processing technology of silicon carbide are relatively complex, with high requirements for equipment and processes. Continuous technological innovation and improvement are therefore necessary to lower production costs and enhance device performance.

3. Market Uncertainty: The silicon carbide market is influenced by factors such as market demand, technological changes, and policy impacts. Fluctuations in market demand or rapid technological shifts may affect the market, increasing market uncertainty.

4. Intensifying Competition: With the development of the silicon carbide market, competition is expected to intensify. Domestic and international competitors may introduce more competitive products, intensifying market competition and posing challenges to the market share and profitability of silicon carbide enterprises.

5. Supply Chain Risks: The production of silicon carbide involves complex supply chains and raw material supplies. Any disruptions or instabilities in the supply chain may impact production, affecting market supply and prices.

Therefore, while the silicon carbide market presents significant potential and opportunities for development, it also requires enterprises to remain vigilant in the face of these risks and challenges, and to take appropriate measures to ensure market competitiveness and long-term stable development.

Disclaimer: The content of this article is sourced from online research and is provided for informational purposes only. It is not intended as professional advice. Readers are encouraged to conduct their own research and consult relevant experts for specific guidance.

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