The global silicon carbide (SiC) supply chain is facing renewed turbulence, driven by weakening EV demand, aggressive market entry by Chinese suppliers, and mounting concerns over a potential bankruptcy at Wolfspeed, the top US-based SiC manufacturer. Wen-Hao Wu, Director of Taiwan-based ACME Electronics, which produces manganese-zinc and nickel-zinc soft ferrite cores alongside SiC powders, commented that while Wolfspeed is a client, it is not a Tier 1 customer, and any exposure remains limited.
Wolfspeed's woes: limited fallout for ACME
Wu explained that Wolfspeed has long adopted a conservative supplier strategy, bringing in new vendors primarily during early product development. These engagements involve protracted qualification processes and typically generate only small-volume orders.
In short, Wolfspeed's financial instability poses minimal disruption to ACME's operations. Wu added that customer feedback has remained normal, and broader market dynamics have shown no significant shifts.
That said, speculation continues over whether Wolfspeed's possible collapse could redirect orders toward rival SiC suppliers.
Wu observed that demand from other customers remains on a steady upward trajectory. Despite Wolfspeed's financial headwinds, ACME has not detected any major red flags in its direct dealings with the company.
Addressing rising competition from Chinese SiC firms, Wu acknowledged China's aggressive push with cost-effective, high-volume output. However, he stressed ACME's differentiation lies in product quality—its SiC powders are manufactured with high precision and exhibit a near-monocrystalline structure. Electron microscopy confirms excellent morphology and purity, with minimal contamination levels.
Wu forecasted growing challenges for Chinese SiC exports to Western markets, citing expected increases in tariffs and trade restrictions. This shift, he noted, could ultimately play to ACME's strengths by underscoring its quality-focused positioning.
SiC strategy and market outlook
Currently, more than 90% of ACME's SiC sales are tied to N-Type SiC, primarily used in electric vehicles. Wu admitted that softening global EV demand has weighed on shipments but said the company is diversifying into new markets and applications. Semi-insulating SiC products continue to see stable demand, part of ACME's broader strategy to reduce dependency on the EV sector.
In the first quarter of 2025, ACME recorded a modest sequential increase in SiC sales, even as EV demand declined across the US and Europe and trade uncertainty persisted. Meanwhile, normalization in automotive inventory levels sparked a minor rebound in ferrite core orders.
Wu reported that revenue from soft ferrite cores rose in the first quarter, compared to the final quarter of 2024. These products currently account for approximately 80% to 90% of ACME's total revenue mix.
Wu expressed cautious optimism for the second half of 2025, citing rising demand for ferrite cores driven by advanced automotive technologies. Applications such as safety systems, autonomous driving, and smart control features—including pressure sensors, surround-view cameras, and smartphone-based remote control—are fueling growth.
Regionally, demand in Europe remains tepid, while Japanese customers are showing signs of recovery, offering a potential catalyst for broader regional growth.
Despite ongoing market headwinds, Wu emphasized ACME's commitment to a diversified growth strategy focused on expanding into new applications and strengthening its product portfolio.
Unlike ferrite cores, ACME's SiC segment continues to face significant pressure, with current shipment volumes hovering just above 50% of their 2024 peak, according to Wu.
Still, Wu pointed to a new facility in Malaysia and ongoing product diversification as reasons for cautious optimism about ACME's near-term outlook.
Article edited by Levi Li
