The Surge and Outlook of the Silicon Carbide (SiC) Power Device Market

Silicon carbide (SiC) power devices leverage a superior semiconductor material known as SiC, which offers several prominent advantages compared to conventional silicon materials.

The benefits stem from its breakthrough technical performance, such as working under higher temperatures and voltage, reducing energy consumption during switching, and enhancing the overall efficiency of electronic systems. The excellent thermal stability of SiC also allows it to operate reliably in extreme conditions, making it well-suited for high-power applications.

SiC devices are diverse and include Bipolar Junction Transistors (BJTs), Field Effect Transistors (FETs), and diodes, all designed to maximize the unique characteristics of SiC material.

SiC devices are increasingly applied in sectors such as renewable energy, power electronics, automotive, and telecommunications, with a growing demand for high-performance solutions. Especially in the automotive industry, as vehicles become more electrified, the need for SiC devices that manage electrical energy is rising. For instance, vehicles equipped with electric propulsion systems require advanced power solutions to optimize driving ranges and boost vehicle performance.

1. SiC Market Growth Drivers

Various factors are driving the growth of the silicon carbide power device market. Firstly, enhanced environmental awareness is prompting industries to seek more efficient energy solutions to minimize environmental impact, making energy-efficient SiC devices particularly appealing.

Additionally, the expansion of the renewable energy industry requires more power equipment that can efficiently handle and convert large amounts of energy, such as solar panel cells and wind turbines, which could significantly benefit from the improved efficiency of SiC devices.

The rising popularity of electric vehicles also drives the demand for power electronic components. By 2030, both electric vehicles and the SiC market are projected to experience widespread growth. Current data suggests that the electric vehicle market will skyrocket by a compound annual growth rate (CAGR) until 2030, with the sales volume expected to reach 64 million units, four times that of 2022.

In such a vibrant market environment, ensuring the supply of electric propulsion system components can keep pace with the fast-growing demand for electric vehicles is crucial. Compared to traditional silicon-based products, SiC metal-oxide-semiconductor field-effect transistors (MOSFETs) used in electric vehicle power systems (especially converters), DC-DC converters, and onboard chargers can offer higher switching frequencies.

This performance difference contributes to increased efficiency, longer vehicle range, and the reduction of overall costs in battery capacity and thermal management. Semiconductor industry participants, such as manufacturers and designers, and automotive industry operators are seen as key forces in seizing the growing opportunities in the electric vehicle market to create value and gain a competitive edge, and they are facing significant challenges in the era of electrification.

2. Drivers in the Electric Vehicle Domain

Currently, the global silicon carbide device industry represents a market of approximately two billion US dollars. By 2030, this figure is expected to surge to between 11 and 14 billion US dollars, with an expected CAGR of 26%. The explosive growth in electric vehicle sales, coupled with its inverter’s preference for SiC materials, suggests that the electric vehicle sector will absorb 70% of SiC power device demand in the future. China, with its strong appetite for electric vehicles, is expected to drive about 40% of the domestic electric vehicle manufacturing industry’s silicon carbide demand.

In the field of electric vehicles (EVs) in particular, the variety of propulsion systems, such as Battery Electric Vehicles (BEVs), Hybrid Electric Vehicles (HEVs), or Plug-in Hybrid Electric Vehicles (PHEVs), as well as the voltage levels of 400 volts or 800 volts, determine the advantages and the extent of SiC application. Pure electric vehicle power systems operating at 800 volts are more likely to adopt SiC-based inverters due to their pursuit of peak efficiency.

By 2030, it is anticipated that pure electric models will account for 75% of total EV production, up from 50% in 2022. HEVs and PHEVs are expected to occupy the remaining 25% of the market share. At that time, the market penetration rate of 800-volt power systems is projected to exceed 50%, whereas this figure was less than 5% in 2022.

In terms of competitive market structure, key players in the SiC domain tend to favor a vertically integrated model, a trend supported by the current market concentration. At present, approximately 60%-65% of the market share is controlled by a few leading companies. By 2030, the Chinese market is expected to maintain its leading position in the SiC supply domain.

3. From 6-Inch to 8-Inch Era

Currently, about 80% of China’s SiC wafers and over 95% of devices are supplied by foreign manufacturers. Vertical integration from wafers to devices can achieve a production increase of 5%-10% and a profit margin improvement of 10%-15%.

The current transition is the shift from manufacturing 6-inch wafers to utilizing 8-inch wafers. The adoption of this material is anticipated to commence around 2024 or 2025 and is expected to achieve a 50% market penetration rate by 2030. The United States market is also projected to start mass production of 8-inch wafers between 2024 and 2025.

Despite initially higher prices due to lower production volumes, 8-inch wafers are expected to see narrowing disparities among major manufacturers over the next decade, thanks to advancements in manufacturing processes and adoption of new technologies. Consequently, the production volumes of 8-inch wafers are projected to increase rapidly to meet market demand and price competition, while also achieving cost savings through the upgrade to larger wafer sizes.

However, despite the broad prospects for the future of the silicon carbide power device market, its growth path is filled with challenges and opportunities. The rapid growth of this market is attributable to the global emphasis on improving energy efficiency, technological progress, enhancement in application performance, and the increasing importance placed on environmental sustainability.

4. Challenges and Opportunities

The growth trajectory of SiC is fueled by the continuous surge in demand for electric vehicles, offering a wealth of opportunities throughout the entire value chain. This emerging technology is gradually reshaping the landscape of the power electronics industry, boasting significant advantages over traditional silicon-based devices.

The rapid proliferation of electric vehicles and the crucial role of SiC in this burgeoning market have profoundly influenced all participants within the entire industry chain. For these entities, their positioning within the ever-evolving SiC market necessitates the consideration of various factors. Today’s semiconductor market is more mature, with a rapid response capacity to market dynamics.

Under these circumstances, all firms within the industry can benefit from continuous monitoring of changes and flexible strategy adjustments. Despite the exponential growth, the SiC market is still facing challenges such as high production costs and manufacturing complexities that restrict its potential for large-scale application. However, ongoing innovation and investment in research and development contribute to cost reduction and increased device distribution.

The supply chain presents another challenge for SiC, from device supply to wafer production, and onto system integration. Any link in these stages could, due to geopolitical or supply security considerations, necessitate the redesign of more adaptable procurement strategies.

On the opportunity front, with the advancement of emerging technologies such as digitization, artificial intelligence, and the Internet of Things, the market demand for more advanced power solutions is continuously growing, with SiC power devices playing a pivotal role. The continuous progression of SiC technology will wield widespread influence across multiple sectors, shaping the future of the power electronics industry. Simultaneously, technological innovation and cost reduction will make SiC technology more accessible, paving the way for its broader application in the electronics market.**