In recent years, with the continuous surge in demand for Silicon Carbide (SiC) substrates, the call for cost reduction in SiC has been growing stronger, as the ultimate product price remains the key determinant for consumers. The cost of SiC substrates accounts for the highest proportion in the entire cost structure, reaching around 50%.
This means that cost reduction and utilization rate improvement in the substrate segment are particularly crucial. Therefore, large-size substrates, due to their cost advantages, are gradually being placed with high expectations.
According to the calculation by Chinese SiC substrate manufacturer TankeBlue Semiconductor, upgrading from 4 inches to 6 inches is expected to reduce costs by 50% per unit; from 6 inches to 8 inches, costs are expected to decrease by an additional 35% on top of that.
Meanwhile, 8-inch substrates can yield more chips, resulting in lower edge wastage. In simple terms, 8-inch substrates offer higher utilization rate, which is the main reason why major manufacturers are actively developing them.
Currently, 6-inch SiC substrates are still dominant, but 8-inch substrates are beginning to penetrate the market. For instance, in July 2023, Wolfspeed announced that its 8-inch fab had begun shipping SiC MOSFETs to Chinese customers, indicating its bulk shipment of 8-inch SiC substrates. TankeBlue Semiconductor has also started small-scale shipments of 8-inch substrates, with plans to achieve medium-scale shipments by 2024.
Accelerated Advancement of 8-Inch SiC Substrate Lineup
Since Wolfspeed first showcased samples in 2015, the 8-inch SiC substrate has undergone a development history of 7-8 years, with significant acceleration in technology and product development in the past two years.
Looking at international manufacturers, aside from Wolfspeed, which has achieved mass production, there are seven SiC substrate, epitaxial, expected to achieve mass production of 8-inch substrates this year or in the next 1-2 years.
In terms of investment, Wolfspeed continues to construct the John Palmour Silicon Carbide Manufacturing Center (SiC substrate facility) in North Carolina, USA. This facility will further drive the expansion of substrate production capacity to meet the increasing demand for 8-inch wafers.
Coherent also announced plans last year to expand its production of 8-inch substrates and epitaxial wafers, with large-scale expansion projects in the United States and Sweden. In terms of product export channels, Coherent has received a USD 1 billion investment from Mitsubishi Electric and Denso to provide long-term 6/8-inch SiC substrates and epitaxial wafers to both companies.
STMicroelectronics also invested in the 8-inch domain last year by partnering with Hunan Sanan Semiconductor to construct an 8-inch SiC fab. The latter will accompany it by establishing an 8-inch SiC substrate plant, ensuring stable material supply for the joint venture. Simultaneously, ST is developing its own substrates and previously collaborated with Soitec to achieve mass production of 8-inch SiC substrates.
Turning to Chinese manufacturers, currently, over 10 enterprises have entered the sampling and small-scale production stages for 8-inch SiC substrates. These include companies such as Semisic Crystal Co., Jingsheng Mechanical & Electrical Co., SICC Co., Summit Crystal Semiconductor Co., Synlight Semiconductor Co., TanKeBlue Semiconductor Co., Harbin KY Semiconductor, IV Semitec, Sanan Semiconductor, Hypersics, and Yuehaijin Semiconductor Materials Co.
In addition to the mentioned companies, there are many other Chinese manufacturers currently researching 8-inch substrates, such as GlobalWafers, Dongni Electronics, Hesheng Silicon Industry, Tiancheng Semiconductor.
At present, the gap between Chinese substrate manufacturers and international giants has narrowed significantly. Companies like Infineon have established long-term partnerships with Chinese manufacturers such as SICC Co. and TanKeBlue Semiconductor Co.. From a technological standpoint, this narrowing gap reflects the overall improvement in substrate technology globally. Moving forward, concerted efforts from various manufacturers are expected to drive the development of 8-inch substrate technology.
Overall, there is a growing momentum in the overall development of 8-inch SiC substrates, with significant breakthroughs in both quantity and quality.
Global 8-Inch SiC Fabs Accelerate Expansion
As substrate materials continue to break through technological ceilings, the expansion scale of global 8-inch SiC fabs reached new heights in 2023.
As per TrendForce, approximately 12 expansion projects related to 8-inch wafers were implemented in 2023. Among them, 8 projects were led by global manufacturers such as Wolfspeed, Onsemi, STMicroelectronics, Infineon, Rohm, and others. STMicroelectronics also collaborated with Sanan Semiconductor on one project. Additionally, 3 projects were spearheaded by Chinese manufacturers such as Global Power Technology, United Nova Technology Co., and J2 Semiconductor.
From a regional perspective, significant investments in new 8-inch SiC fabs are expected in key regions such as Europe, America, Japan, South Korea, China, and Southeast Asia. As of now, there are approximately 11 8-inch fabs either under construction or planned globally (with clearer details).
These include 2 facilities by Wolfspeed (in Mohawk, USA, and Saarland, Germany), 1 by Bosch (in Roseville, USA), 1 self-built by STMicroelectronics (in Catania, Italy), 1 joint venture with Sanan (in Chongqing, China), 1 by Infineon (in Kulim, Malaysia), 1 by Mitsubishi Electric (in Kumamoto, Japan), 2 by Rohm (in Chikugo, Japan, and Kunitomi, Japan), 1 by ON Semiconductor (in Bucheon, South Korea), and 1 by Fuji Electric (in Matsumoto, Japan).
Regarding the expansion directions of manufacturers, Bosch and ON Semiconductor’s investments in 2023 are directly aimed at the automotive SiC market. STMicroelectronics’s planned 8-inch SiC chip factory in Italy also targets the electric vehicle market. While other manufacturers have not explicitly stated the application direction of future production capacity, electric vehicles are the primary growth engine for SiC both currently and in the future, making it a focal point for expansion among major manufacturers.
In the electric vehicle sector, the 800V high-voltage platform has emerged as a clear development trend. The 800V platform requires higher-voltage power semiconductor components, prompting manufacturers to begin developing 1200V SiC power devices.
From a cost perspective, although 6-inch wafers are currently mainstream in the short term, the trend towards larger sizes like 8-inch is inevitable for cost reduction and efficiency improvement purposes. Therefore, the electric vehicle market is expected to drive continuous growth in demand for 8-inch wafers in the future.
From a supply chain perspective, transitioning to 8-inch wafers represents a breakthrough for SiC manufacturers. Per industry insights, the 6-inch SiC device market has entered a phase of intense competition, particularly in the SiC JBD. For smaller-scale and less competitive enterprises, profit margins are increasingly squeezed, indicating an impending round of consolidation and restructuring in the future.
