(Yicai) Feb. 28 -- The joint venture between Chinese semiconductor giant Sanan Optoelectronics and Swiss peer STMicroelectronics has completed the construction of its CNY23 billion (USD3.2 billion) silicon carbide wafer factory in Chongqing.

The factory, which is the first of its kind in China, is expected to start mass-producing eight-inch automotive-grade SiC electronic control chips in the fourth quarter and eventually reach an annual output of about 480,000 units, according to the inauguration ceremony held yesterday.

Sanan has a 51 percent stake in the JV, with STMicro's subsidiary STMicroelectronics (China) Investment owning the rest and contributing its proprietary SiC manufacturing process technology.

The project's SiC chips will be produced by Sanan and use the STMicro brand, Li Zhidong, deputy general manager of the Chinese firm, told Yicai yesterday.

This way, STMicro's SiC solutions can integrate into the Chinese new energy vehicle industry ecosystem, helping reduce imports through preferential localized production, Jean-Marc Chery, president and chief executive officer of STMicro, said at the inauguration ceremony.

SiC chips can help NEVs increase their cruising range to 600 kilometers and achieve 20-minute fast charging, Chery added.

China-made SiC chips will be widely used in NEVs in the next one to two years, with their cost expected to drop by 40 to 50 percent, Sanan's Vice Chairman and GM Lin Kechuang said at the 2025 Semiconductor Manufacturing and Supply Chain Forum in Chongqing yesterday.

The supply of domestic SiC chips will increase, and their prices will decline because of factors such as improved production efficiency and packaging yield and the localization of production equipment and raw materials, Lin Zhidong explained to Yicai.

The surging demand for high-efficiency power modules for NEVs will drive the application of SiC chips in the Chinese market, Lin Kechuang noted. The size of China's automotive-grade SiC power chip market is expected to reach CNY22.2 billion by 2028.

According to data from market research firm TrendForce, the Chinese SiC chip market will likely reach a size of USD2.2 billion this year and USD6.1 billion in 2030, up 22 percent and 239 percent, respectively, from last year.

Editors: Tang Shihua, Futura Costaglione