Smaller SiC materials suppliers in China will find it harder to purchase related manufacturing equipment in tight supply.
A major Chinese EV maker is aggressively foraying into the SiC supply chain by seeking to sweep in all the available equipment from international vendors, according to supply chain sources. Meanwhile, severe shortages of automotive chips have driven many Chinese automakers, including BYD and Geely Automobile, as well as handset vendors like Huawei and Xiaomi to deepen their deployments in automotive semiconductors, with some even adopting a dual-track approach to develop both silicon-based and compound semiconductors, the sources said.
The sources pointed out that a first-tier EV maker in China, which saw its car sales explode in the past six months, is moving to build its own SiC-based power devices supply chain, ranging from components, modules and upstream materials, and its aggressive equipment procurements have worsened the shortages of related equipment supply, obviously squeezing the opportunity for the delivery of equipment ordered by smaller SiC material makers.
Smaller SiC supply chain players in China, the sources stressed, will find 2023 a test year for their operations due to three major factors. First is that their financial support from local municipal and provincial governments in China is likely to slow down, as the local governments have become frugal as a result of pandemic control measures, inflation and other unfavorable macro environments in 2022.
Second, some investors reportedly are mulling to withdraw their funds from those smaller SiC suppliers who remain unable to break though production bottlenecks. This has caused some suppliers to hype the big orders received or the readiness of crucial technologies, apparently aiming to attract more new funds.
Third, smaller SiC makers' capacity utilization and revenue performances are not likely to improve well amid increasingly intense competition among peers, which in turn will further dent the confidence of strategic funders.
Accordingly, equipment makers pointed out that the entire SiC supply chain is likely to undergo a reshuffle, with those with weak competitiveness to be weeded out of the market. Nevertheless, they stressed, rapidly emerging business opportunities for SiC devices will remain unaffected, because such devices can withstand high temperature environments, lower the use of passive components, and reduce the weight of EVs, with the advantages able to offset their much higher costs than silicon-based components.
In terms of GaN and SiC semiconductor applications, 62% of SiC devices are applied to EVs with a voltage of over 1,200V, at a CAGR of 39% during 2021-2027, while 63% of GaN devices are used in sub-1200V consumer applications, at a CAGR of 52% during the period, according to statistics from Taiwan's Industry Technology Research Institute (ITRI).
Article translated by Willis Ke
