1、 The rise of the industrial chain: How can SiC "become popular"?

1.1 Technical Principles and Industrial Logic

Silicon carbide (SiC) is a third-generation wide bandgap semiconductor material that has high breakdown electric field, high thermal conductivity, and high electron mobility compared to silicon (Si), making it the preferred material for high-voltage, high-frequency, and high-temperature power devices.

The application fields have expanded from new energy vehicles (IGBT → SiC MOSFET) to photovoltaic inverters, energy storage, industrial control, rail transit, data centers, and more.

1.2 Market growth drivers

Taking Tesla Model 3 as a watershed, SiC power modules for automobiles were introduced on a large scale (2018~), followed by domestic car companies such as BYD, NIO, and Xiaopeng, accelerating the domestic industrial chain.

The global production of electric vehicles is expected to exceed 12 million units by 2024, and the penetration rate of SiC devices in mainstream vehicle models continues to increase.

2、 Requirement analysis: Real space and ceiling

2.1 Calculation of Demand Scale

Yole, TrendForce, ICWise and other institutions predict that the global demand for SiC substrates will be about 2.5 million pieces (6 inches equivalent) by 2025, and is expected to reach 7 million pieces by 2029.

The usage of bicycles continues to increase, and mainstream platforms have been upgraded to 800V/900V, driving the value of SiC devices to double.

2.2 Constraints on Demand Growth

Vehicle cost pressure: SiC costs are still significantly higher than traditional Si solutions, and mainstream passenger car penetration relies on battery cost reduction and platform high-end.

Terminal demand fluctuation: The global car market growth rate will slow down in 2024, and high-end brands in Europe and America will postpone their pure electric targets. Some brands have adjusted their new energy strategies (such as Mercedes Benz, BMW, Toyota, Ford) and dynamically optimized their pure electric platforms and SiC usage.

Diversified application expansion: Although the demand for emerging fields such as energy storage, photovoltaics, power grids, and industrial control is growing rapidly, the absolute scale is far smaller than that of the main battlefield in vehicles.

3、 Capacity surge: How did the crisis of overcapacity form?

3.1 Global Expansion Wave

Top players from 2023 to 2025 are rushing to compete: Wolfspeed, ST, Infineon, Anson ROHM、 Sanan, Tianyue, Tianke Heda, Sanan Optoelectronics, Yifa Chongqing Joint Venture, etc., 6/8/12 inch multi-point flowering.

The global SiC substrate production capacity is expected to reach 4 million pieces by 2025, and the monthly output of major domestic factories is rapidly increasing. For example, the monthly production capacity of Sanan series has exceeded 10000 pieces.

3.2 Policy and capital driving force behind this round of expansion

The consensus that "SiC is the core material of new energy" has made investment extremely aggressive, fueled by national funds, special subsidies from local governments, and hot money in the capital market.

Local governments in China are competing to attract investment, and some projects are actively offering benefits to support the industrial chain, resulting in short-term "duplicate construction" and serious homogenization.

3.3 Industry internal competition and capacity utilization risk

Industry data shows that in the second half of 2024, the capacity utilization rate of many manufacturers was less than 70%, and the actual output of some small and medium-sized manufacturers was far below their design capacity.

The price war is unfolding ahead of schedule: the price of 6-inch substrates has dropped from 4500 yuan/piece at the beginning of the year to below 2800 yuan/piece by the end of the year, and many companies are approaching the breakeven line or even selling at a loss.

4、 Price Logic: Why Expand Production while Diving?

4.1 Mismatch of supply and demand and "price war"

High expectations for production expansion → Short term demand release falls short of expectations → Overcapacity leads to price drops.

In order to seize market share, top enterprises adopt a strategy of low profit and high sales, and the pressure to reduce costs quickly spreads to upstream raw materials/equipment.

4.2 Cost differentiation

Leading enterprises have economies of scale, independent equipment, technological barriers, and can afford lower prices.

Small and medium-sized manufacturers are accelerating their elimination in the price war due to technological/financial disadvantages.

5、 Corporate Landscape: Head Competition and Structural Reshaping

5.1 Domestic and foreign mainstream manufacturers' production capacity and strategies

Abroad: Wolfspeed/ROHM focuses on high-end products and continues to invest in 8-inch/12 inch lines; ST、 Infineon and Anson are promoting full industry chain self ownership and strengthening vertical integration.

Domestic: Sanan Optoelectronics' 8-inch production capacity continues to increase, and Tianyue/Tianke Heda is sprinting towards high-end substrates; STMicroelectronics Chongqing, BYD Semiconductors, NIO, Ideal, and Xiaopeng have all strengthened their independent research and production/vertical collaboration to improve localization rates and technological barriers.

5.2 Joint venture cooperation becomes a new trend

Anyifa Semiconductor Chongqing Joint Venture, BYD/Sanan/Xiaopeng and other "host factories+material factories" collaborate.

Collaborate with Taiwan's Maosi, Pengcheng, World Advanced, Hanlei, Hongyang Technology, and others to fill in the gaps in localization.

6、 Capital and Policy Variables: Cyclicality and Uncertainty

6.1 Capital driven prosperity and foam

Industrial capital/local investment enthusiasm is high, but some projects have not formed industrial synergy, resulting in "production capacity but no market".

The policy orientation tends towards rationality, and after 2024, many regions will tighten their support for production capacity projects, shifting towards encouraging technological innovation, downstream applications, and full chain ecology.

6.2 The dilemma of American giant Wolfspeed

High debt, uncertain subsidies, and declining performance reflect the systemic risks and market cycle pressures that may arise from aggressive expansion of production.

7、 Technology and Alternative Threats: Multi Route Game

7.1 Material Diversity Challenge

There are significant performance differences among various polycrystalline forms of SiC (4H, 6H, 15R, etc.), and the process control is difficult; GaN (Gallium Nitride) has the advantage of high frequency and efficiency in penetrating emerging scenarios such as charging, fast charging, and power supply.

The technological roadmap game is uncertain, and some high-end application scenarios may lean towards GaN, requiring close attention to the progress of substitution.

7.2 Device Reliability and Engineering Bottlenecks

Long term cyclic heating/cooling can easily cause structural phase transition and device failure, and further improvement of testing standards and reliability assurance is needed.

8、 Automotive Strategy and New Applications: Technology Driven Market Diversification

8.1 Domestic host manufacturers lead independent technology

NIO, BYD, Xiaopeng, Xiaomi and others are promoting self-developed and self-produced SiC modules, strengthening platform vertical integration, and achieving cost reduction and efficiency improvement.

The price of SiC modules for cars has dropped to around 1500 yuan per unit, and charging efficiency and reliability have been simultaneously improved.

8.2 Overseas giants flexibly adjust their new energy strategies

Mercedes Benz, BMW, Toyota, and others have not aggressively "bet" on pure electric vehicles, choosing multi-path parallelism. The slower penetration speed of new energy vehicles directly affects the pace of SiC demand release.

9、 Future outlook and risk warning

9.1 The coexistence of short-term pains and long-term dividends in the industry

From 2025 to 2026, there may be a reshuffle window for the SiC industry, with some production capacity cleared and enterprises with outstanding technological and collaborative capabilities expected to stand out.

With the expansion of applications in charging, energy storage, industrial control, rail transit, data centers and other scenarios, the demand for SiC market will continue to grow.

9.2 Suggestions for the Healthy Development of the Industry

Enterprises need to rationally evaluate the pace of capacity expansion, attach importance to technological innovation, downstream collaboration, and real market demand growth.

At the policy level, we should further guide capital to return to rationality, with a focus on encouraging breakthroughs in technological breakthroughs and bottleneck links in the industrial chain.