The main points

SIC power devices: excellent performance, 20 times growth in 10 years

Both the technology and material innovation of power semiconductors are committed to improving the energy conversion efficiency (ideal conversion rate is 100%). Compared with traditional Si-based power devices, power devices based on SIC materials have higher efficiency and lower losses. Uninterruptible power supply, industrial control of home appliances, etc. have broad application prospects. At present, the bottleneck in the development of the SIC industry is mainly due to the high cost of SIC substrates (4-5 times that of Si, and it is expected that the price will gradually drop to 2 times that of Si in the next 3-4 years), and the stability of SIC devices represented by SIC MOS is stable. It takes time to verify. We believe that the SIC industry chain at home and abroad is becoming more and more mature, and the cost is continuing to decline. The inflection point of the industry chain is approaching. Yole predicts that the SIC device space will be from 480 million US dollars in 2019 to 3 billion US dollars in 2025 and 10 billion US dollars in 2030, that is, 10 years. 20 times growth.

SIC chip: the gap between domestic and foreign is narrowed, and the industry's high growth + domestic substitution will be carried out at the same time

SIC wafers are mainly used for SIC power devices and 5G GaN RF devices. In the next 10 years, the market space will grow with the growth of downstream SIC power devices + GaN high-frequency RF devices. We expect the SIC wafer market to grow from RMB 3 billion in 2019 to 2027 More than 15 billion RMB per year;

High industry growth + domestic substitution, Tianke Heda/Shandong Tianyue is expected to become the Shanghai silicon industry in the field of SIC wafers: Compared with ordinary silicon wafers, which are distributed in the hands of the five giants in Japan, South Korea and the United States, more than 70% of the share of SIC chip leaders is In companies such as CREE and II-VI in the United States, localization is also more urgent. At present, the domestic SIC chip leaders such as Shandong Tianyue and Tianke Heda have begun to take shape, and the gap between domestic and foreign third-generation semiconductor SICs is larger than that of the traditional semiconductor field. This time, the outbreak of the SIC chip industry and the domestic substitution will be carried out at the same time, and the relevant companies will fully benefit from this wave of third-generation semiconductor industry dividends.

Investment Advice

There will be some new companies entering the SIC industry chain, but the original IGBT leaders and other traditional power device companies will also be important players in SIC power devices, and will fully benefit from this wave of industry trends for more than ten years.

Suggested attention:

1) The domestic IGBT leader took advantage of the trend to cut into the SIC field, paying attention to Star Semiconductor and the unlisted BYD Semiconductor/CRRC Times Semiconductor;

2) Traditional power devices are upgraded to SIC devices, including Wingtech, China Resources Micro, Jiejie Microelectronics, Yangjie Technology, New Clean Energy; and more pure SIC device manufacturers, Tyco Tianrun, etc.;

3) Roshow Technology, which lays out SIC equipment and materials, and Sanan Optoelectronics, which has a full layout of the third-generation semiconductor SIC/GaN;

4) Tianke Heda and Shandong Tianyue in the field of SIC chips.

risk warning

SIC cost reduction is less than expected;

The stability and reliability indicators of SIC devices are lower than expected;

The risk of further widening the gap between the domestic SIC industry chain and foreign countries;

The macro-economy leads to the risk of declining industry prosperity.

It is recommended to pay attention to the company's profit forecast and rating:

text table of contents

1 The third-generation semiconductor SIC: excellent performance, the eve of the outbreak

1.1 Performance advantages of third-generation semiconductor SIC materials

1.2 Performance Advantages of the Third Generation Semiconductor SIC Devices

1.3 Policy Support VS Industry Maturity Improvement

1.4 Summary of SiC Industry Chain

2 SIC devices: 20 times growth in 10 years, comprehensive domestic layout

2.1 Application: New energy vehicle charging piles and photovoltaics will be the first to adopt

2.2 Threshold: Barriers and Difficulties of SIC Devices

2.3 Space & Growth Rate: SIC devices will grow at a compound rate of 40% in the next 5-10 years

2.4 Landscape: Competitive Landscape of SIC Devices

3 SIC chips: high growth and high barriers, domestic production is catching up

3.1 Growth Analysis

3.2 Barrier Analysis

3.3 Competitive Analysis

3.4 Value Analysis

4 Investment advice

4.1 Tianke Heda

4.2 Shandong Tianyue

4.3 Star Semiconductor

4.4 Sanan Optoelectronics

4.5 China Resources Micro

4.6 Jiejie Microelectronics

4.7 Yangjie Technology

4.8 Roshow Technology

risk warning

1. The third-generation semiconductor SIC: excellent performance, the eve of the outbreak

1.1 Performance advantages of third-generation semiconductor SIC materials

The first generation of semiconductor materials mainly refers to silicon (Si) and germanium (Ge) semiconductor materials, which are widely used, including integrated circuits, electronic information network engineering, computers, mobile phones, televisions, aerospace, various military engineering and rapid development. It has been widely used in new energy and silicon photovoltaic industries;

The second generation of semiconductor materials mainly refers to compound semiconductor materials, such as gallium arsenide (GaAs) and indium antimonide (InSb), which are mainly used to make high-speed, high-frequency, high-power and light-emitting electronic devices (LEDs). Excellent material for microwave, millimeter wave devices and light-emitting devices.

Si-based devices reach the limit of their performance in high voltage and high power applications above 600V; in order to improve the performance of devices under high voltage/high power, the third-generation semiconductor material SiC (wide band gap) came into being;

The third-generation semiconductors are mainly SIC and GaN. The second and third generations are also called compound semiconductors, which are semiconductor materials composed of two elements, which are different from elemental semiconductors such as silicon/germanium:

SIC materials have obvious performance advantages. SiC and GaN are the third-generation semiconductor materials. Compared with the first- and second-generation semiconductor materials, they have performance advantages such as wider band gap, higher breakdown electric field, and higher thermal conductivity, so they are also called wide-gap. Band semiconductor material, especially suitable for 5G RF devices and high voltage power devices.

1.2 Performance advantages of third-generation semiconductor SIC devices

SIC power devices such as SIC MOS, compared with Si-based IGBTs, have lower on-resistance, which is reflected in the product, that is, the size is reduced, thereby reducing the volume, and the switching speed is fast. Compared with traditional Power devices to be greatly reduced.

In the field of electric vehicles, batteries are heavy in weight and high in value. If the power consumption and volume can be reduced in the use of SIC devices, the arrangement of batteries will be more flexible; at the same time, the application of SIC in high-voltage DC charging piles will make charging The time is greatly shortened, which brings huge social benefits.

According to the calculation provided by Cree: when the power components in the BEV inverter of pure electric vehicles are changed to SIC, the power consumption of the whole vehicle can be reduced by 5%-10%; this can improve the battery life or reduce the cost of power batteries.

To sum up, the various advantages of SiC devices will drive the improvement of the battery life of electric vehicles:

1). High power conversion efficiency: SiC is a wide energy gap material, and its breakdown field strength is larger than that of Si-based semiconductor materials, which is more suitable for high-power application scenarios;

2). High power utilization efficiency: SiC is a wide energy gap material, and its breakdown field strength is larger than that of Si-based semiconductor materials, which is more suitable for high-power application scenarios;

3). Low ineffective heat consumption: high switching frequency and fast speed, resulting in less ineffective heat consumption, simplifying the circuit and heat dissipation system.

In 2019, the international power semiconductor giants continued to launch new power devices based on SIC materials, and several SiC SBDs and MOSFETs launched meet the vehicle-level (AEC-Q101) standard. These products are used in new energy vehicles or photovoltaic fields. In the scenario of equal power device demand, the power consumption will be significantly reduced and the conversion efficiency will be improved.

1.3 Policy Support VS Industry Maturity Improvement

1.3.1 The world has launched a comprehensive strategic deployment of the third-generation semiconductors

At the beginning of 2014, the United States announced the establishment of the "National Manufacturing Innovation Center for Next-Generation Power Electronics Technology". fast emerging markets, and created a large number of high-income jobs in the United States.

Japan has established the "Next Generation Power Semiconductor Packaging Technology Development Alliance", led by Osaka University, and cooperated with 18 well-known companies, universities and companies engaged in the development and industrialization of SiC and GaN materials, devices and application technologies, including ROHM, Mitsubishi Electric, and Panasonic. Research center;

Europe has launched the industry-university-research project "LAST POWER", led by STMicroelectronics, in collaboration with private companies, universities and public research centers from six European countries, including Italy and Germany, to jointly tackle key technologies of SiC and GaN.

1.3.2 Domestic policy support continues to strengthen

my country's "Made in China 2025" plan clearly proposes to vigorously develop the third-generation semiconductor industry. In May 2015, China established the third-generation semiconductor material and application joint innovation base to seize the new strategic highland of the third-generation semiconductor; the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the Beijing Municipal Science and Technology Commission led the establishment of the third-generation semiconductor industry technology innovation strategic alliance (CASA). ), which is of great significance to promoting the research and development of third-generation semiconductor materials and devices in my country and the development of related industries.

1.3.3 The main bottleneck restricting industrial development lies in cost and reliability verification

The bottleneck of industry development currently lies in the high cost of SIC substrates: the current cost of SIC is 4-5 times that of Si, and it is expected that the price will gradually drop to about 2 times that of Si in the next 3-5 years. The growth rate of the SIC industry depends on the SIC industry. The speed of chain maturity is currently high, and the product parameters and quality of SIC devices have not been sufficiently verified;

The product stability of SIC MOS requires time to verify: According to experts at Infineon’s 2020 Power Semiconductor Application Conference, SiC MOSFETs have a very short time to actually land, and they have just started commercial use in the automotive field (Model 3 is the first to use SIC MOS Some technical indicators such as short-circuit withstand time do not provide enough verification, and it takes a long time for SIC MOS to verify its own stability and life in the fields of automotive and industrial control;

According to Yole's forecast, the penetration rates of SIC and GaN power electronic devices (note the application of GaN in power electronics, excluding high-frequency radio frequency devices) will be 3.75% and 1% respectively in the overall power device penetration rate in 2023; the driving factor is new energy New energy power generation and fast charging for automobiles.

We believe that the SIC industry chain at home and abroad is becoming more and more mature, costs continue to decline, and downstream acceptance has begun to increase. At present, the entire industry chain is on the eve of the industry outbreak.

1.4 Summary of SiC Industry Chain

1.4.1 Three major links in the SIC industry chain:

The SIC industry chain is divided into three major links: upstream SIC wafers and epitaxy → manufacturing of intermediate power devices (including three small links of classic IC design → manufacturing → packaging) → downstream industrial control, new energy vehicles, photovoltaic wind power and other applications. At present, the upstream wafers are basically monopolized by American manufacturers such as CREE and II-VI in the United States; domestically, SiC wafer manufacturers Shandong Tianyue and Tianke Heda have been able to supply 2-inch to 6-inch single crystal substrates, and their revenue has reached SiC epitaxial wafers: Xiamen Hantiancheng and Dongguan Tianyu can produce 2-inch to 6-inch SiC epitaxial wafers.

Foreign SIC power device players:

Traditional power device manufacturers include Infineon, STMicroelectronics, Mitsubishi Electric, Fuji Electric; CREE involved in SIC devices with SIC materials;

Domestic SIC power device players: Tyco Tianrun, CLP 55, Basic Semiconductor, Sanan Integrated, China Resources Micro, etc.

SIC wafers, epitaxy and equipment: foreign CREE and II-VI account for more than 70% of SIC wafers, domestic Shandong Tianyue and Tianke Heda have begun to take shape; Roshow announced in November 2019 that Roshow will Customized about 200 silicon carbide crystal growth furnaces for the silicon carbide industrialization project led by Zhongke Steel Research and Guohong Zhongyu. The total purchase amount of equipment is about 300 million yuan. At the same time, Roshow announced plans to cooperate with Hefei in August 2020. Invest 10 billion yuan to build the third-generation semiconductor industrial park, and cut into the substrate and epitaxy from SIC equipment.

2. SIC devices: 20 times growth in 10 years, comprehensive domestic layout

2.1 Application: New energy vehicle charging piles and photovoltaics will be the first to adopt

SiC has various advantages mentioned above and is a relatively ideal material for high-voltage/high-power/high-frequency power devices. Therefore, SiC power devices are used in new energy vehicles, charging piles, photovoltaic wind power for new energy power generation, etc. The areas where indicators such as loss and loss are more important have obvious development prospects.

Si-IGBT is used for high frequency and low voltage, SiC MOS is used for high frequency and high voltage, and GaN is used for high voltage and low power. When the low frequency and high voltage are used, the Si IGBT is the best. If the high frequency is slightly high but the voltage is not very high and the power is not very high, the Si MOSFET is the best. If it is both high frequency and high voltage, SiC MOSFET is the best. The voltage does not need to be very large, the power does not need to be very large, but the frequency needs to be very high, and GaN works best in this case.

Taking the application of SIC MOS in new energy vehicles as an example, according to the calculation provided by Cree: when the power components in the BEV inverter of pure electric vehicles are changed to SIC, the power consumption of the whole vehicle can be reduced by 5%-10%; this can improve the battery life, or reduce the cost of power batteries.

At the same time, SIC MOS will also have great potential in the fields of fast charging and charging piles. The fast charging pile converts external alternating current into direct current through IGBT or SIC MOS, and then directly charges the battery of the new energy vehicle. It is also sensitive to the loss and its own occupied volume. Therefore, regardless of cost, SIC MOS is more efficient than IGBT. There is prospect and demand. Since the cost of SIC is currently 4-5 times that of Si, it will be first introduced in fast charging piles with high power specifications. In the field of photovoltaics, high efficiency, high power density, high reliability and low cost are the future development trends of photovoltaic inverters. Therefore, photovoltaic inverters based on SIC materials with better performance will also be an important application trend in the future.

The application of SIC Schottky diodes also has advantages over traditional Schottky diodes. Silicon carbide Schottky diodes compared to traditional silicon fast recovery diodes (SiF

RD) with ideal reverse recovery characteristics. When the device switches from forward conduction to reverse blocking, there is almost no reverse recovery current, and the reverse recovery time is less than 20ns, so the SiC Schottky diode can work at a higher frequency and has a higher frequency at the same frequency. s efficiency. Another important feature is that the SiC Schottky diode has a positive temperature coefficient, and the resistance gradually increases as the temperature rises, which makes the SIC Schottky diode very suitable for paralleling and practical, increasing the safety and reliability of the system. In summary, SIC Schottky diodes have the following characteristics: 1) almost no switching losses; 2) higher switching frequency; 3) higher efficiency; 4) higher operating temperature; 5) positive temperature coefficient , suitable for parallel operation; 6) The switching characteristics are almost independent of temperature.

According to the statistics of CASA, the actual transaction price of SiC SBD in the industry has dropped to less than 1 yuan/A. The bulk purchase price of products with a withstand voltage of 600-650V in the industry is about 0.6 yuan/A, and the products with a withstand voltage of 1200V are sold in bulk in the industry. The purchase price is about 1 yuan/A.

As shown in the table above, the price of some SIC Schottky diode products has dropped by 20%-35% in 2019. The continuous reduction in the price of SIC diodes and the narrowing of the price difference with Si diodes will further promote the application of SIC diodes.

2.2 Threshold: Barriers and Difficulties of SIC Devices

Most of the SIC difficulty is concentrated in the crystal growth and substrate fabrication of SIC wafers, but there are also some difficulties in order to make a device, mainly including:

1. Low epitaxy process efficiency: The gas phase epitaxy of silicon carbide is generally carried out at a high temperature above 1500 °C. Due to the problem of sublimation, the temperature should not be too high, generally not exceeding 1800°C, so the growth rate is low. Liquid phase epitaxy has lower temperatures and higher rates, but lower yields.

2. Production of ohmic contact: Ohmic contact is one of the most important processes in the manufacture of devices, and it is still difficult to form a good ohmic contact of silicon carbide in practice;

3. High temperature resistance of supporting materials: The silicon carbide chip itself is resistant to high temperature, but the supporting materials may not be able to withstand temperatures above 600°C. Therefore, the improvement of the overall working temperature requires continuous innovation in supporting materials.

The excellent performance of SIC has been recognized earlier. The reason why there has been good progress in recent years is mainly because SIC chips and SIC devices have some difficulties compared with traditional power devices, and the production of devices is difficult and costly. Coupled with the high difficulty of manufacturing silicon carbide wafers (which will be mentioned later), the two cycle each other, which has restricted the promotion speed of SIC applications in the past few years to a certain extent. The night before, the inflection point is approaching.

2.3 Space & Growth Rate: SIC devices will grow at a compound rate of 40% in the next 5-10 years

IHS expects a compound growth rate of 40% for SIC devices in the next 5-10 years: According to IHSMarkit data, the market size of silicon carbide power devices in 2018 is about 390 million US dollars, driven by the huge demand for new energy vehicles, and the demand for photovoltaic wind power and charging piles. Efficiency and power consumption requirements are increasing. It is expected that the market size of silicon carbide power devices will exceed US$10 billion by 2027, and the compound growth rate in 9 years from 18 to 27 is close to 40%.

Measure the market space of SIC MOS devices from the perspective of penetration rate: (SIC MOS is only one type of SIC device) The downstream of SIC MOS devices and IGBT have a large degree of overlap. Therefore, the driving factors that drive the high growth of IGBT industry space such as vehicle, charging pile, industrial control, Photovoltaic wind power and home appliance markets are also the fields that SIC MOS power devices will be involved in in the future; according to our previous series of industry reports, the global IGBT market in 2019 will be 5.8 billion US dollars, and China's 2.2 billion US dollars will be used in vehicles, charging piles and industrial control. Driven by photovoltaic and wind power, it is estimated that in 2025, IGBT will reach US$12 billion globally and US$6 billion in China.

The penetration rate of SIC MOS devices depends on the cost reduction and the maturity of the industry chain. According to the research of Infineon and related domestic companies and the judgment of experts in the industry, the inflection point of SIC MOS penetration of IGBTs may be around 2024. It is estimated that the global penetration rate will be 25% in 2025, and there will be a $3 billion SIC MOS device market in the world. According to the 20% penetration rate, China will have a SIC MOS space of $1.2 billion in 2025. That is, regardless of SIC SBD and other SIC power devices, only the SIC MOS market that replaces IGBT is estimated to be a global market of 3 billion US dollars in 2025, which is more than 7 times growth compared to less than 400 million US dollars in 2019, and the growth rate will be from 2025 to 2030. continue.

2.4 Landscape: Competitive Landscape of SIC Devices

At present, the silicon carbide device market is still dominated by foreign traditional power leading companies. The top three global market shares in 2017 are Cree, Rohm and STMicroelectronics. Among them, Cree has cut into SIC devices from SIC upstream materials, which is quite Because of its ability to integrate the industry chain from upstream SIC chips to downstream SIC devices.

Domestic companies are all in the initial stage or have just entered the SIC field, including traditional power device manufacturers China Resources Micro, Jiejie Microelectronics, and Yangjie Technology, which have entered the SIC field from traditional silicon-based MOSFETs, thyristors, and diodes. IGBT manufacturer Star Semiconductor, BYD Semiconductor, etc., but the current domestic SIC device revenue scale is relatively small (Yangjie Technology recently disclosed that the SIC revenue in the first half of 2020 was about 192,800 yuan);

The unlisted companies and units that have done better are some of the ones mentioned in the previous industrial chain summary, including:

Tyco Tianrun: SiC SBDs can be mass-produced, covering 600V/5A~50A, 1200V/5A~50A and 1700V/10A series; and as early as 2015, Tyco Tianrun announced the launch of a high-power silicon carbide Schottky diode products are relatively pure companies engaged in SIC devices;

55 Institute of CLP: The domestic unit that realizes the whole industry chain from 4-6 inch silicon carbide epitaxial growth, chip design and manufacturing, and module packaging;

Shenzhen Basic Semiconductor: Founded in 2016, it was founded by a doctoral team from well-known universities at home and abroad, such as Tsinghua University, Zhejiang University, and Cambridge University. It focuses on SIC power devices. It is also one of the initiators of the third-generation semiconductor research institute in Shenzhen. Its 1200V SiC MOSFET products.

3. SIC chip: high growth and high barriers, domestic production is catching up

3.1 Growth Analysis

3.1.1 Downstream Devices Corresponding to SIC Chips

As mentioned in the previous analysis, silicon carbide wafers are mainly used to make high-voltage power devices and high-frequency power devices: SIC wafers are mainly divided into two types: conductive SIC wafers are subjected to SIC epitaxy to make high-voltage power devices; semi-insulating wafers SIC wafers undergo GaN epitaxy to manufacture 5G RF devices (especially PA);

3.1.2 Future market space and growth of downstream devices of SIC chips

Silicon carbide wafers are mainly used for high-power and high-frequency power devices: In 2018, the global market size of gallium nitride radio frequency devices was about 420 million US dollars (about 2.8 billion yuan). With the advancement of 5G communication networks, the gallium nitride radio frequency device market Will expand rapidly, Yole predicts that by 2023, the global RF gallium nitride device market size will reach 1.3 billion US dollars (about 9.1 billion yuan); continuing to quote the previous IHS forecast, SIC power devices will increase from 450 million US dollars in 2019 to 2019. Nearly $3 billion in 2025.

The market size of third-generation semiconductors in the field of power devices: (GaN here is used for power devices)

The market size of the third-generation semiconductor GaN in the high-frequency RF field: According to Yole's data, the GaN RF market size in 2017 was US$400 million, and it will grow to nearly US$1.3 billion in 2023, with a compound growth rate of 22%. The overall structure of downstream applications remains stable, with communications and military industries as the main ones, which together account for about 80%. The overall RF device market space is around 8% in 2018-2025, and the growth rate of GaN RF devices is much higher than the growth of the overall RF device market.

3.1.3 Market space and growth rate of SIC chips

The conductive silicon carbide single crystal substrate material is the base material for the manufacture of silicon carbide power semiconductor devices. According to the calculation of the China Wide Bandgap Power Semiconductor and Application Industry Alliance:

Market demand from 2017 to 2020: 100,000 for 4-inch and 15,000 for 6-inch in 2017  It is estimated that by 2020, the number of 4-inch will remain at 100,000, and the 6-inch will exceed 80,000.

Market demand in 2020-2025: 4-inch wafers will gradually decrease from 100,000 to 50,000, and 6-inch wafers will increase from 80,000 to 200,000;

2025~2030: 4-inch wafers will gradually withdraw from the market, and 6-inch wafers will grow to 400,000.

Semi-insulating silicon carbide has high resistance and can withstand higher frequencies, and is mainly used in high-frequency radio frequency devices; also according to the calculation of China Wide Bandgap Power Semiconductor and Application Industry Alliance:

Market demand in 2017: the global market demand for semi-insulating silicon carbide wafers is about 40,000; 2020: 40,000 4-inch semi-insulating SIC wafers and 50,000 6-inch semi-insulating SIC wafers;

Market demand in 2025: It is expected that 4 inches of semi-insulation will reach 20,000 pieces, and 6 inches to 100,000 pieces;

Market demand in 2025-2030: 4-inch semi-insulating substrates gradually withdraw from the market, while 6-inch demand reaches 200,000 pieces.

We estimate that the overall global market space for SIC wafers is expected to increase from RMB 3 billion in 2020 to RMB 15 billion in 2027. For comparison, the global silicon wafer market in 2018 is $9 billion, and the domestic silicon wafer market is about RMB 13 billion (nearly 8 years). compound growth of 5%-7%).

3.2 Barrier Analysis

The barriers of SIC chips are relatively high, mainly reflected in:

The core parameters of SIC wafers include micropipe density, dislocation density, resistivity, warpage, surface roughness, etc. It is a complex system engineering to arrange atoms in an orderly manner in a closed high temperature chamber, complete crystal growth, and control parameters at the same time. Processing the grown crystals into wafers that can meet the requirements of semiconductor device manufacturing involves a series of difficult process control; With the increase of silicon carbide crystal size and the improvement of product parameter requirements, the difficulty of customized setting and dynamic control of production parameters will be further increased. Therefore, it is very difficult to stably mass-produce high-quality silicon carbide wafers with low fluctuations in various performance parameters, which are mainly reflected in the following aspects:

1. Precise regulation of temperature: Silicon carbide crystals need to be grown in a high temperature environment above 2,000 °C, and the growth temperature needs to be precisely regulated in production, which is extremely difficult to control;

2. It is easy to generate polymorphic impurities: there are more than 200 crystal structure types in silicon carbide, among which the hexagonal 4H-type (4H-SiC) and other single-crystalline silicon carbide with a few crystal structures are the required semiconductor materials. In the crystal growth process, parameters such as silicon-carbon ratio, growth temperature gradient, crystal growth rate, and gas pressure need to be precisely controlled, otherwise polymorphic inclusions are likely to occur, resulting in unqualified crystals;

3. Difficulty in crystal diameter expansion: Under the vapor phase transport method, the diameter expansion technology of silicon carbide crystal growth is extremely difficult. With the expansion of crystal size, the growth difficulty process increases geometrically;

4. The hardness is extremely difficult to cut: the hardness of silicon carbide is close to that of diamond, and the cutting, grinding and polishing techniques are difficult, and the improvement of the technological level requires long-term R&D accumulation;

3.3 Competitive Analysis

3.3.1 Overseas basic monopoly market

At present, the silicon carbide wafer industry pattern presents the characteristics of the United States' global dominance. Taking conductive products as an example, in 2018, the United States accounted for more than 70% of the global silicon carbide wafer production, and CREE alone accounted for more than 60% of the market share, and most of the remaining shares were occupied by other silicon carbide companies in Japan and Europe.

3.3.2 Latecomers are more difficult

Due to the special physical properties of silicon carbide materials, the technology and process requirements of its crystal growth, crystal cutting, wafer processing and other links are high, requiring long-term investment and deep cultivation to form industrialized production capacity, and the industry threshold is very high.

It is difficult for the silicon carbide wafer manufacturers that entered later to form a large-scale supply capacity in the short term. The market supply still mainly relies on the existing wafer manufacturers to expand their own production capacity. The situation of insufficient supply of domestic silicon carbide wafers is expected to remain for a period of time. .

3.4 Value Analysis

Upstream SIC chips are mainly used for SIC power devices and 5G high-frequency radio frequency devices. In the next 10 years, the market space will grow with the growth of downstream SIC power devices + high-frequency radio frequency devices. We expect that from RMB 3 billion in 2020 to close to 2027 15 billion RMB;

High industry growth + domestic substitution + high barriers: Tianke Heda/Shandong Tianyue can be simply analogized to the Shanghai silicon industry in the field of SIC chips, and traditional silicon chips are distributed in the five giants of Japan, South Korea and the United States, while SIC chip leaders are 70%+ In the past decade, in the growth of downstream semiconductors, domestic upstream silicon wafer manufacturers have limited participation; this time, SIC devices and 5G in the next 10 years Among the high-frequency radio frequency devices, the domestic SIC chip leader will actively participate in it, and the industry's explosive growth and localization will be carried out at the same time, and it will continue to enjoy a high valuation.

4. Investment advice

4.1 Tianke Heda

4.1.1 Company Profile: SIC chip leader with fast growth

Tianke Heda is a leading company in the domestic third-generation semiconductor material SIC chip: the company was established on September 12, 2006, and was listed on the national stock transfer system from April 2017 to August 2019. Listed on the Science and Technology Innovation Board.

The company's growth rate is extremely fast. From 2017 to 2019, the company's revenue increased from 24 million to 155 million yuan, with a two-year compound growth rate of 154%.

4.1.2 Revenue composition: SIC chips account for about half

The company's revenue consists of three parts: silicon carbide wafers account for 48.12%, other silicon carbide products such as gemstones account for 36.65%, and silicon carbide single crystal growth furnaces account for 15.23%.

4.1.3 Self-made equipment: integrated layout from equipment to SIC chips

The company uses high-purity silicon powder and high-purity carbon powder as raw materials, and uses physical vapor transport (PVT) to grow silicon carbide crystals and process them into silicon carbide wafers; among them, the growth equipment of silicon carbide crystals - silicon carbide single crystal growth furnace company It can also be self-made and sold externally.

4.1.4 Management

(1) Mr. Liu Wei, born in March 1967, Chinese nationality, no overseas permanent residency, is a senior engineer, graduated from Xi'an Jiaotong University with a master's degree in electrical engineering. From July 1990 to March 2001, successively served as a specialist in the production technology section of Shihezi Thermal Power Plant, the director of the boiler branch, the deputy director of the maintenance branch, the manager of the thermal branch company, the director of the production technology section, the deputy director, and the director; 2001 From March to December 2008, he served as Deputy General Manager of Tianfu Thermal Power Plant and Director of Thermal Power Plant, Director of East Thermal Power Plant, Secretary and Director of South Thermal Power Plant; from December 2008 to June 2019, served as Tianfu Group Party Committee Member and Tianfu Thermal Power Plant Deputy Secretary of the Party Committee and Director and Chairman of Nanshan Thermal Power Plant, Deputy Secretary of the Party Committee, Secretary of the Party Committee, Chairman of Tianfu Group and Secretary of the Party Committee and Vice Chairman of Tianfu Thermal Power (Tianfu Energy); Since June 2019, he has served as Secretary of the Party Committee of Tianfu Group , Chairman, Secretary of the Party Committee and Chairman of Tianfu Energy. From March 2015 to October 2015, he served as the chairman of Tianke Heda Co., Ltd.; since October 2015, he has served as the chairman of the company.

(2) Mr. Yang Jian, born in September 1976, Chinese nationality, without the right of permanent residence abroad, graduated from the University of Chinese Academy of Sciences with a master's degree in project management. From July 1999 to December 2001, he was the accountant of the financial department of Xinjiang Zhonghe Co., Ltd.; from January 2002 to December 2006, he was the manager of the financial department of Beijing Tianfu Technology Co., Ltd.; from January 2007 to September 2011 From January 2012 to August 2013, he served as the deputy general manager of Zhangjin Technology (Beijing) Co., Ltd. From September 2013 to October 2015, he successively served as the deputy general manager, director and general manager of Tianke Heda Co., Ltd.; since October 2015, he has served as the director and general manager of the company.

4.1.5 Gross profit margin of the company

The gross profit margin of the company's products increased significantly with the increase in scale, from -12% in 2017 to 29.45% in Q1 2020.

4.1.6 Company Capacity and Output

In 2019, the company's SIC production capacity was 37,525 pieces, with an output of 36,879 pieces, and the capacity utilization rate exceeded 98%. The capacity utilization rate has also remained high in the past two years.

Note:
1. The production capacity and output of silicon carbide wafers are uniformly converted into the number of 4-inch products;
2. Shenyang Branch was established on August 31, 2018, and began to engage in the sales of silicon carbide single crystal growth furnaces in October 2018. The production capacity is 25 units/month.

4.1.7 Sales volume and unit price of the company

The average sales prices of Tianke Heda SIC tablets in 2017/2018/2019/2020Q1 were 2002.95 yuan/2420.57 yuan/2286.75 yuan/3042.96 yuan respectively, and the average price showed a steady upward trend.

4.1.8 Industry Pattern and Company Status

Company status: In 2018, in terms of conductive SIC, Tianke Heda ranked sixth in the world with a market share of 1.7%, and ranked first in domestic conductive silicon carbide wafers.

4.1.9 Top five customers of the company

Most of the company's top five customers are domestic SIC industry chain companies, including Sanan Integration, CLP Chemicals, Dongguan Tianyu, etc.

4.1.10 R&D investment and technical level

R&D investment of the company: R&D investment in 2018: 12.62 million; R&D investment in 2019: 29.19 million; January-March 2020: 5.68 million; The company has a total of 75 technical R&D personnel, accounting for 13.7% of the company's total employees, including core technicians 5; the company has 34 authorized patents, including 33 authorized invention patents (including 6 international invention patents); the company has successively won the "Eleventh Five-Year" National Science and Technology Plan Execution Excellent Team Award, Xinjiang Production and Construction Corps The first prize of the Science and Technology Progress Award and other important awards;

Stages of the company's products and research and development: Stage 1: 06-07: 2-inch conductive and semi-insulating products were successfully developed; 08-11: 3-inch conductive and semi-insulating products were successfully developed and sold in small quantities; Stage 2: 12 -16 years: 4-inch conductive/semi-insulating type was successfully developed and sold in small quantities; Phase 3: 2017: 4-inch conductive type mass production; 2018: 6-inch semi-insulating type was successfully developed; 2019: 4-inch semi-insulating type Mass production of products; 2020: 8-inch products begin to be developed.

4.1.11 Future development plan and fundraising capacity:

Fundraising projects: On the basis of the existing production capacity, the company plans to expand the production of silicon carbide substrate materials, its main business. The content includes the construction of a production base including crystal growth, wafer processing and cleaning and testing.

Project goal: After the project is put into production, the annual output of 120,000 6-inch silicon carbide wafers, of which about 82,000 pieces of 6-inch conductive silicon carbide wafers, and about 38,000 pieces of 6-inch semi-insulating silicon carbide wafers.

Project investment: The total investment of this project is 957.06 million yuan, of which fixed assets investment is 884.380 million yuan and working capital is 72.68 million yuan. The project construction period is 2 years.

4.2 Shandong Tianyue

1. The leading enterprise of semi-insulating SIC chips: the company was established in 2010, focusing on the production of silicon carbide crystal substrate materials; the company's products are mainly semi-insulating SIC chips. The company has invested and built a third-generation semiconductor material industrialization base, which has the software and hardware conditions for R&D and production of internationally advanced semiconductor substrate materials. It is an advanced enterprise in the third-generation semiconductor substrate material industry in my country.

2. Growth ability: It is understood that the company's revenue has increased from about 110 million in 2018 to more than 250 million in 2019 (about half of which are SIC derivatives, gemstones, etc.), a year-on-year increase of more than 100%. The company's SIC chips are mainly concentrated in the semi-insulating type, while Tianke Heda is mainly concentrated in the conductive type.

3. Huawei's shareholding: Huawei's Hubble Technology Investment holds 8.17% of Shandong Tianyue.

4. Production capacity (the company uses the number of crystal growth furnaces for characterization): Shandong Tianyue's production capacity is mainly determined by the number of crystal growth furnaces. In 2019, there are nearly 250 crystal growth furnaces on the production line, and about 25,000 substrates are sold. It is estimated that another batch of crystal growth furnaces will be purchased before the end of the year, and the target will be increased to more than 550;

5. Sales price: In 2018 and 2019, the average sales price of the company's substrates is about 6,300 yuan/piece and 8,900 yuan/piece. It is expected that the average price this year will exceed 9,000 yuan. The main reason for the price change is 2.3 inches. The proportion of relatively low-priced substrates such as small-sized substrates and N-type substrates has gradually decreased, and the proportion of high-value 4-inch high-purity semi-insulating products has gradually increased, resulting in an increase in unit selling prices.

6. Technical strength: Shandong Tianyue's silicon carbide technology originated from the State Key Laboratory of Crystallography of Shandong University. The company purchased the patent of Academician Jiang Minghua of the laboratory in 2011, and invested a lot of research and development. After years of process accumulation, the silicon carbide lining The technology has developed from a laboratory to an industrialized technology; Shandong Tianyue has 6 joint R&D centers overseas in addition to a 30-person R&D team; the company has nearly 300 patents, including about 50 advanced invention patents. , about 220 advanced practical patents, and more than 50 invention patents under application.

4.3 Star Semiconductor

1. 97.5% of Star Semiconductor’s revenue is IGBT, which is the purest IGBT target among the listed power semiconductor companies. In 2019, the revenue was 780 million (yoy+15.4%), and the net profit attributable to the parent was 1.35 (yoy+39.8%). The global market share of IGBT modules is 2%, ranking eighth in the world;

2. Star Semiconductor is actively conducting the layout of the third-generation semiconductor SIC. The company's SiC-related products and technical reserves are in full swing:

3. The company's key technology research and development plans in the future:

It mainly mentions three important product development: 1. The research and development of a full range of FS-Trench IGBT chips; 2. The research and development of a new generation of IGBT chips; 3. The research and development, design and large-scale production of cutting-edge power semiconductor products such as SiC and GaN: The company will adhere to scientific and technological innovation, and constantly improve the layout of the power semiconductor industry. While vigorously promoting conventional IGBT modules, relying on its own professional technology, the company will actively deploy wide-bandgap semiconductor modules (SiC modules, GaN modules), continuously enrich its own product categories, strengthen Its own competitiveness and further consolidate its position in the industry.

4. The company cooperates with Yutong Bus and other customers to develop SIC vehicle modules

On June 5, 2020, Yutong Bus, a leader in the bus industry, announced that its new energy technology team is using the 1200V SiC power module jointly developed by Star Semiconductor and CREE to develop an industry-leading high-efficiency motor control system. Commercial application of SiC inverters in the field of new energy buses.

Yutong said, "Star and CREE's efforts and innovations in SiC coincide with Yutong's high-end product development route for motor controllers, and also practice Yutong's development concept of "travel for a better life", I believe the three parties The cooperation on SiC will definitely be fruitful.”

In our previously released Star Semiconductor in-depth report, we estimated Star's revenue elasticity in 2025 under different SIC penetration rates and different SIC market share scenarios. Neutrally, it is estimated that Star's domestic SIC device market share will be 6 in 2025. -8%. It is expected that after the domestic SIC industry chain such as Shandong Tianyue and Sanan Optoelectronics becomes more mature in 2023-2024, SIC will usher in the inflection point of replacing IGBT, but IGBT and SIC MOS will also coexist for a long time. It is believed that domestic technology is leading and high-quality IGBT leader Star Semiconductor can continuously reserve related technologies and products, and actively embrace and welcome innovations in this industry.

4.4 Sanan Optoelectronics

1. The company is mainly engaged in the research and development and application of compound semiconductor materials, with epitaxial wafers and chips involved in new semiconductor materials such as gallium arsenide, gallium nitride, silicon carbide, indium phosphide, aluminum nitride, and sapphire as its core business. Products are mainly used in lighting, display, backlight, agriculture, medical, microwave radio frequency, laser communication, power devices, optical communication, induction sensing and other fields;

2. The company's main business is LED chips, which account for more than 80% of the company's revenue. LEDs are optoelectronic devices based on compound semiconductors, with technical interoperability in substrate, epitaxy and device links;

3. Sanan Integration, a subsidiary of the company that focuses on compound semiconductors, showed positive changes in business in 2019 compared with the same period:

1) RF business products are used in 2G-5G mobile phone RF power amplifier WiFi, Internet of Things, routers, communication base station RF signal power amplifiers, satellite communications and other market applications. GaAs RF products have shipped to more than 90 customers, and the customer areas cover domestic and foreign; Important customers of GaN RF products have achieved batches. Production, production capacity is gradually climbing;

2) On June 18, 2020, the company announced that Sanan Optoelectronics decided to set up a subsidiary in the Changsha High-tech Industrial Development Zone Management Committee Park to invest in the development and industrialization projects of third-generation semiconductors including but not limited to silicon carbide and other compounds, including Crystal growth - substrate production - epitaxial growth - chip preparation - packaging industry chain, with a total investment of 16 billion yuan. The company completed the construction of the first phase of the project and put it into production within 24 months after the land use procedures and related conditions were completed, 48 months Complete the construction of the second phase of the project and the investment in fixed assets and put it into production within 72 months;

3) The high-power density silicon carbide power diodes and MOSFETs and GaN-on-silicon power devices launched by Sanan IC are mainly used in power markets such as new energy vehicles, charging piles, photovoltaic inverters, etc., with more than 60 customers and 27 types The product has entered the stage of mass production.

4) Sanan IC achieved sales revenue of 241 million yuan in 2019, a year-on-year increase of 40.67%; the recognition and industry trends of Sanan IC's products have already emerged, and it is foreseeable that there will be a lot of room for development in the power semiconductor of the third-generation material SiC/GaN in the future. broad.

4.5 China Resources Micro

1. The company is China's leading semiconductor enterprise with integrated management capabilities of the entire industry chain such as chip design, wafer manufacturing, packaging and testing, and its products focus on power semiconductors, intelligent sensors and intelligent control;

2. Products and manufacturing in parallel: the company's revenue in 2019 was 5.7 billion yuan, of which products and solutions accounted for 43.8%, and manufacturing and services accounted for 55%. The manufacturing and service businesses are mainly wafer manufacturing and packaging and testing. Mainly power semiconductors, accounting for 90%, including MOSFET, IGBT, SBD and FRD and other products;

3. The company currently has a 6-inch wafer manufacturing capacity of about 2.47 million wafers per year and an 8-inch wafer manufacturing capacity of about 1.33 million wafers per year, and has the ability to provide customers with a full range of large-scale manufacturing services;

4. Active layout in the SIC field: On July 4, 2020, the company held a SIC product launch and released a full range of 1200V/650V SIC diode products. The company is expected to use the IDM mode in various power semiconductor products of SIC materials. The field is deeply cultivated and continues to benefit from product upgrades and domestic substitution.

4.6 Jiejie Microelectronics

1. The company is a leader in domestic thyristors, and continues to deploy high-end power semiconductor devices such as MOSFETs and IGBTs. According to the company's annual report, in 2019, the revenue of power discrete devices accounted for 75%, and the revenue of power semiconductor chips accounted for 23%; about 50% of the company's power discrete devices are thyristors (for power conversion and control), and some diodes. Business, the rest are protective device series (the main function is to prevent surge shock, anti-static electronic products inside, protect the internal expensive electronic circuits);

2. On February 27, 2020, the company signed a "Power Device Strategic Cooperation Agreement" with SMIC (Shaoxing) Co., Ltd. (referred to as "SMEC") to develop and produce related high-end power devices such as MOSFETs and IGBTs. In-depth cooperation in the field; the announcement discloses that Jiejie Microelectronics guarantees to use SMEC as a strategic partner to maximize the capacity of SMEC.

3. The company has been deeply engaged in discrete devices such as thyristors and diodes for a long time. These customers overlap with related high-end power devices such as MOSFETs and IGBTs. After the company cuts into MOS from the field of thyristors, it will also actively apply the third generation of these two product categories. Semiconductor SIC, to prepare for the subsequent improvement of its own device performance and product competitiveness.

4.7 Yangjie Technology

1. The company is a power discrete device company with a wide product line. The company's products mainly include power diodes, rectifier bridges, high-power modules, small-signal transistors, MOSFETs, and a small number of IGBT products. According to the company's annual report, in 2019, power discrete device revenue accounted for 80%, power semiconductor chip revenue accounted for 13.8%, and semiconductor silicon wafer business accounted for 4.55%.

2. The company's third-generation semiconductor SIC devices currently have less revenue. The company is actively deploying high-end power semiconductors, preparing to establish a Wuxi R&D center, signing a guarantee supply agreement with SMIC (Shaoxing), and continuing to expand the special design and development team for 8-inch MOS products, and has formed Trench MOSFET and SGT MOS series products for mass sales.

3. The current proportion of SIC products is small: the company announced in September 2020 that the current main products are still mainly silicon-based power semiconductor products, and the sales revenue of third-generation semiconductor products accounts for a small proportion. From January to June 2020, the company The sales revenue of silicon carbide products was 192,800 yuan.

4. We believe that, like Jiejie Microelectronics, the company is the leader in the niche market of mid-to-low-end power devices, although the current proportion of SIC products is small, mainly because the inflection point of the maturity of the domestic industry chain has just arrived; the company will actively deploy in the future Various power devices based on SIC materials can improve their product performance and achieve a continuous and steady increase in market share, opening up business ceilings and imagination.

4.8 Roshow Technology

1. The traditional main business is electromagnetic wire products: the company is a professional enterprise integrating R&D, production and sales of energy-saving motors, electromagnetic wires, turbochargers and sapphire long chips. The company's main products include various copper and aluminum core electromagnetic Wires, ultra-fine electromagnetic wires, energy-saving motors for small household appliances, brushless motors, CNC motors, turbochargers and sapphire crystal growth equipment and other products. The company is one of the main suppliers of magnet wire products in China and one of the largest production bases of aluminum core magnet wire and ultra-fine magnet wire products in China.

2. SIC crystal growth equipment has been supplied to the outside world: Roshow Technology is based on sapphire technology reserves. After years of research and development, it has quickly broken through the silicon carbide process barriers, and has deployed silicon carbide crystal growth furnaces and wafer production on the basis of sapphire. Silicon carbide and sapphire have strong commonality and technical basis from equipment, process to substrate processing, such as precise temperature field control, precise pressure control, precise seed crystal orientation growth and substrate processing barriers. With the support of many years of sapphire production technology, the company has successfully developed silicon carbide independent controllable crystal growth equipment, and began to supply SIC crystal growth equipment to the outside world in 2019.

3. The talent advantage of the company's layout of SIC: The company has introduced a technical team with more than 20 years of experience in the silicon carbide industry to carry out research on silicon carbide substrates and epitaxy technology, and increase the layout of the silicon carbide industry. In April 2020, the company issued a non-public fundraising announcement. The total amount of funds to be raised is not more than 1 billion yuan, which will be used for new silicon carbide substrate wafer industrialization projects, silicon carbide R&D center projects and repayment of bank loans. With the development and mass production of the company's silicon carbide products, the company is expected to gain a certain market share.

4. Cooperate with Hefei to build the third-generation semiconductor SIC industrial park: On August 8, 2020, the Hefei Changfeng County People's Government signed the "Hefei Changfeng County and Roshow Technology Co., Ltd. to jointly invest in the construction of the third-generation semiconductor industry" at the Hefei Municipal Government. Strategic Cooperation Framework Agreement for Power Semiconductor (Silicon Carbide) Industrial Park. Including but not limited to the R&D and industrialization projects of third-generation semiconductors such as silicon carbide, including the R&D and production of silicon carbide crystal growth, substrate fabrication, epitaxial growth, etc. The total project investment is estimated to be 10 billion yuan.

At the same time, it is recommended to pay attention to other unlisted SIC industry chain related manufacturers such as BYD Semiconductor, CRRC Times Semiconductor, Tyco Tianrun and other high-quality power semiconductor companies.

risk warning

SIC cost reduction is less than expected;

The stability and reliability indicators of SIC devices are lower than expected;

The risk of further widening the gap between the domestic SIC industry chain and foreign countries;

The macro-economy leads to the risk of declining industry prosperity.

Source: Huaan Electronics Huaan Securities Research Institute