In 2023, China's compound semiconductor industry achieved a historic breakthrough. In the field of silicon carbide (SiC) crystal growth, the country especially received recognition from international IDMs, leading to a significant increase in production capacity by Chinese manufacturers. Previously, SiC materials from China accounted for only 5% of the global market. However, by 2024, it is expected to grab a substantial market share.
Key Chinese companies in this sector, including SICC, TankeBlue and San'an, have each expanded their production capacity almost uniformly by a factor of a thousand units.
There are approximately four to five leading companies engaged in SiC crystal growth in China, providing a basis for calculating the country's SiC crystal growth production capacity. Currently, their combined monthly production capacity is around 60,000 units. With each company aggressively increasing production, it is estimated that monthly production capacity could reach 120,000 units by 2024, with an annual production capacity of an estimated 1.5 million units.
Compared to the estimated global supply of SiC wafers in 2023, which stands at around 1.7 million units, it is predicted that China's 2024 supply could potentially account for about half of the global market share.
According to various industry sources and market research institutions, SICC and TankeBlue collectively hold approximately 5% of the global market share. In contrast, the four leading global players—Wolfspeed (60%), Coherent (15%), Rohm's SiCrystal (13%), and SK Siltron (5%)—hold significantly larger shares.
Previously, many market research institutes were skeptical toward the production capacity, actual output, and quality of Chinese manufacturers. Nevertheless, companies such as Bosch, Infineon, and STMicroelectronics have all signed contracts and formed joint ventures with companies like SICC, TankeBlue and San'an, which can be seen as a guarantee of China's strength and quality. This indirectly indicates China's fast-growing involvement in the SiC materials supply chain.
Currently, the global SiC wafer market predominantly uses 150 mm wafers. With Chinese manufacturers rapidly expanding, it is estimated that the industry could see a significant shift by 2024, resulting in SiC chips no longer facing the severe shortages seen in the past and could lead to notable price reductions as new production capacity from Chinese manufacturers becomes available. This situation may pose challenges for less competitive manufacturers, particularly those with poor yields and production costs that don't align with the market's average pricing.
In anticipation of a new competitive landscape, SiC material suppliers in Europe and the United States have sped up financing activities in the second half of 2023, fearing to be eliminated. Due to the overheated SiC market, the Chinese government has also complicated the approval process for newcomers in 2023. These restrictions not only apply to SiC materials, but also to silicon wafers, in doing so barring some well-established SiC design companies from expanding into the silicon wafer sector, even if their main shareholders include leading companies in the European automotive supply chain.
