Looking back at 2024, the silicon carbide and gallium nitride industries have made significant progress and undergone important changes in multiple areas. Looking ahead to 2025, the industry will also face new opportunities and challenges. In order to better understand the industry landscape and explore future directions, the third-generation semiconductor industry - expert outlook 2025 special report was jointly planned by Expert Talk on Third-Generation Semiconductors and Expert Aurora Award.

This episode's guest is Li Xiaoteng, Deputy General Manager and Chief Marketing Officer of Nashe Intelligent. Next, we will continue to invite more leading companies to participate in "Expert Outlook 2025." Stay tuned.

 

 

Short-term fluctuations in the SiC market

But long-term opportunities are rising

Expert Talk on Third-Generation Semiconductors: According to Expert Talk Research estimates, the SiC power semiconductor market will grow by about 14% year-on-year in 2024, a slower growth rate than last year. How do you view the underlying reasons for the significant fluctuations in SiC demand?

Li Xiaoteng: The fluctuations in demand for SiC power semiconductor markets are the result of multiple factors.

1. Cost factors: In the past few years, silicon carbide has developed rapidly with technological advancements and substantial industry investment. The materials and equipment in each link of the industrial chain have significantly reduced costs, driven by both technological breakthroughs and intensified competition leading to price reductions. This has enabled more growth downstream, but until there is a further revolutionary breakthrough in silicon carbide technology, cost reduction has encountered a bottleneck, and fierce competition has led to lower and lower profits, resulting in slower industry growth than before.

2. Reliability issues: Silicon carbide semiconductors have superior material properties and outstanding device performance. Currently, the main application scenarios worldwide are still in the electric vehicle field. However, as of 2024, the long-term stability and durability of domestic silicon carbide devices and the production yield of enterprises still need further verification and improvement, which makes domestic electric vehicle manufacturers somewhat hesitant about the large-scale application of domestic devices.

3. Politics and policies: Affected by international politics and the global economic environment, especially the slowdown in the growth rate of electric vehicle sales overseas due to increased tariffs imposed by Western countries. In addition, the early development of silicon carbide benefited from financial and preferential policy support from national and local governments, but with the weakening or adjustment of policy intensity, and to some extent restrictions on industrial development and new entrants, the growth rate may be affected.

4. Inventory accumulation: Photovoltaic and other fields that may use silicon carbide devices may face overcapacity and product inventory accumulation in 2024, leading to more inventory digestion and slower growth.

However, in the long run, with the continuous maturity of technology, the optimization of management in many small and medium-sized enterprises in the industry, the expansion of application fields, and the global trend towards green energy transformation, the silicon carbide market still has huge growth potential.

Expert Talk on Third-Generation Semiconductors: If you were to summarize the development of the SiC industry in 2024 with three keywords, which three would you choose?

Li Xiaoteng: Transformation, pressure, progress.

Expert Talk on Third-Generation Semiconductors: Although the SiC industry entered a period of adjustment in 2024, there were also highlights in its development. What new progress do you think the industry has made in 2024? What is the future direction of the SiC industry?

Li Xiaoteng: Although the industry entered an adjustment period in 2024, it still made considerable progress and achievements.

First, technological progress: In the development path of large-size materials, the development speed of 8-inch materials is faster than expected, and the parameters of its substrates and epitaxy are close to 6 inches. More and more silicon carbide companies have achieved breakthroughs and mass production of 8-inch materials, and 8-inch silicon carbide wafer device line projects are also actively expanding. It can be said that 2024 is the first year of the 8-inch explosion. In 2024, some crystal substrate manufacturers even released 12-inch substrates, although the parameters and mass production capacity are still in the very early stages, it also lays the foundation for the industry's further development towards larger sizes in the future. In addition, corresponding equipment manufacturers have successively launched new generations of products with larger capacity, better indicators, and greater convenience to meet the development needs of the industry.

Second, overseas markets: For a considerable number of Chinese silicon carbide companies, 2024 has yielded certain results in overseas markets. Numerous companies have appeared at various international semiconductor-related exhibitions, either enhancing brand awareness or gaining potential customers and actual orders and deliveries. This lays the foundation for the brilliance of China's new productive forces on the international stage.

Third, capacity and price: Although overcapacity has triggered price wars, it has laid a good capacity foundation for the industry's next explosive development.

The future development direction of the industry requires more breakthroughs in technology, such as improving the capacity and process indicators of equipment, and comprehensively improving mass production stability and convenient maintainability, so as to enhance the mass production yield and reliability of materials and devices.

On the other hand, there should be progress and innovation in device structural design and corresponding production processes. In terms of industry applications, in addition to continuously promoting the wider use of silicon carbide in new energy vehicles, it is also necessary to increase the promotion and application in energy storage systems, data centers, smart home appliances, etc., to promote better cost reduction and volume increase of silicon carbide. In addition, it can be seen that silicon carbide will usher in new opportunities with the development of electric aircraft and electric ships.

Demand slowdown and overcapacity coexist

Nashe 8-inch SiC process helps the industry break through

Expert Talk on Third-Generation Semiconductors: The competition in the SiC industry is becoming increasingly fierce. How do you view the changing competitive landscape? What are the main challenges and opportunities?

Li Xiaoteng: In 2024, the silicon carbide power semiconductor market grew by about 14% year-on-year, a slower growth rate than last year, but it still maintained positive growth, which means that the market is gradually entering a relatively stable development stage. Judging from the revenue data in 2024, international manufacturers have larger revenue scales but slower growth rates, while domestic manufacturers have smaller scales but faster progress. With the technological advancement and price competition of China's silicon carbide industry chain, the competitiveness of international giants' products is also being challenged.

The main challenges facing the silicon carbide industry are that the growth rate of global application-end demand has not met expectations, and the industry has overcapacity. Based on this, for international manufacturers, the main challenge is to adjust their strategies to cope with the improvement of product capabilities and price challenges from Chinese manufacturers. For domestic manufacturers, they face challenges in product reliability, product performance improvement, maintaining cost advantages, and customer development and binding.

In general, the silicon carbide market has broad prospects. With continuous technological advancements, new application fields and market demands will emerge, such as low-altitude economic fields and aerospace, bringing new development opportunities for enterprises.

Expert Talk on Third-Generation Semiconductors: How do you view the development of 8-inch SiC? What is your company's layout in this area?

Li Xiaoting: The development of 8-inch silicon carbide represents a further advancement and expansion of silicon carbide technology. Compared to traditional 4-inch or 6-inch wafers, 8-inch silicon carbide has a larger diameter, allowing for higher chip yields and lower costs. This helps to promote the adoption and scaling of silicon carbide in a wider range of applications.

Our company has launched a new generation of fully automated dual-chamber equipment for 8-inch epitaxial growth. This equipment features fully automated loading and unloading and a unique reaction chamber that enables the production of high-quality epitaxial layers while maintaining low cost and ease of maintenance. It provides customers with a more effective solution for cost control and mass production, meeting the industry's needs for reduced costs and increased efficiency.