China’s compound semiconductor sector experienced a monumental evolution in 2023, particularly in the domain of silicon carbide (SiC) crystal growth. This feat saw China earning respect from renowned international IDMs, which consequently propelled a substantial rise in production by local manufacturers. Historically, China’s contribution to the global SiC material market was a mere 5% however, Nikkei reports that more than half of the world’s SiC wafers might come from China in 2024.
Leading industry players, such as SICC, TankeBlue and San’an, have considerably bolstered their production scales, each increasing by a thousand-fold factor. As it stands, four to five primary firms drive China’s SiC crystal growth, cumulatively possessing a monthly production capacity of about 60,000 units. With the rampant augmentation in production, it’s envisaged that by 2024, this figure will double to 120,000 units monthly, translating to an annual output of nearly 1.5 million units.
When set against the 2023 global SiC wafer supply pegged at approximately 1.7 million units, China’s forecasted 2024 production could rival half the global market. Current market analysis reveals that SICC and TankeBlue jointly control about 5% of the global market, a modest portion compared to global titans such as Wolfspeed (60%), Coherent (15%), Rohm’s SiCrystal (13%), and SK Siltron (5%).
Although there was initial market apprehension concerning China’s production volume and quality, influential entities like Bosch, Infineon, and STMicroelectronics have since cemented partnerships with Chinese firms, including SICC, TankeBlue, and San’an. These collaborations underscore China’s burgeoning role in the SiC materials supply chain.
The present SiC wafer market leans heavily on 150 mm wafers. However, with China’s fast-paced expansion, it is believed that by 2024, the industry might undergo a significant transformation. This shift could alleviate the acute SiC chip shortages of yesteryears and possibly instigate a noticeable price drop, thanks to the new manufacturing prowess of Chinese players. However, this emerging landscape could spell trouble for less efficient manufacturers, especially those grappling with subpar yields and misaligned production costs.
Recognising the changing tides, SiC suppliers from the US and Europe have ramped up their financial endeavours in late 2023, dreading obsolescence. In a bid to regulate the surging SiC market, the Chinese administration has also tightened entry protocols in 2023, extending restrictions to silicon wafers. These measures have hamstrung several prominent SiC design firms, inhibiting their expansion into the silicon wafer arena, despite some having backing from Europe’s elite automotive suppliers.
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