Yole: What is the Next Step for SiC?

By the end of this decade, SiC (silicon carbide) revenue in the power electronics sector is expected to reach $10 billion, and strong growth in 2023 is a key step in the development of multiple application areas. Pure electric vehicles remain the main market driver, with Tesla’s shipment volume of 1.8 million vehicles in 2023, while major original equipment manufacturers (OEMs) such as Hyundai, BYD, Xiaopeng, and NIO are increasingly launching 800V pure electric vehicles. All major SiC device manufacturers are supplying this application, helping it achieve record revenue in 2023. At the same time, other applications such as electric vehicle chargers, power supplies, photovoltaics, etc. are waiting for the next generation SiC device design to achieve sufficient mass production at competitive costs. The SiC wafer and epitaxial wafer business also achieved record revenue in 2023.

However, some people are concerned that shipments are slowing down due to the global economic downturn. Many participants are reassessing the timing of resuming growth, will it be in the third quarter of 2024 or later? The SiC supply chain is closely monitored as market performance in 2024 will be severely affected.
At the same time, the supply chain is being reshaped. From the revenue ranking in 2023, it can be seen that currently, at least 2 Chinese companies have entered the top 5 of SiC wafers and epitaxial wafers. This also indicates that the equipment supply supporting this rapidly growing SiC market is mature.
Another important consideration is supply and demand issues. In the past few years, SiC wafer supply is tight; LTA (Long Term Agreement) with wafer suppliers is crucial for ensuring the acquisition of SiC wafers. However, with the significant expansion of production capacity in the past two years, discussions have shifted towards the risks of price and overcapacity. This is a situation that SiC supply chain must now manage, and different participants will implement various strategies.