Although different segments of the industry have different performance, but overall, 2023 is the semiconductor market pressure and inventory consolidation of the year. But there is also a clear contrarian industry-the silicon carbide (SiC) market.

As a class of emerging compound semiconductors, the silicon carbide market is accelerating the verification of new energy vehicles due to Tesla's first application. In the past two years, it has also been a year for the global silicon carbide giants to actively expand production, carry out mergers and acquisitions and open up cooperation.

The expansion of production and the hot market landing are also quickly reflected in the performance of the relevant companies. Whether it is an international giant or a domestic A- share listed company, the performance related to silicon carbide in 2023 has shown a rapid growth trend.

Compared with the first generation of semiconductor silicon, the development of silicon carbide, known as the third generation of semiconductors, is relatively early, so related investment and financing are particularly frequent. According to incomplete statistics from the third-party organization Jibang Compound Semiconductor, Hundreds of financing events occurred in the entire SiC industry chain in 2023, and many manufacturers completed two or even multiple rounds of financing during the year.

At present, the application of silicon carbide still faces certain challenges. Product performance, application cost, and large-scale mass production are all important propositions. Just as Tesla, which was the first to adopt silicon carbide power devices, announced in 2023 that it would significantly reduce the amount of silicon carbide, showing that there is still much room for improvement in its application.

The industry chain is already thinking and exploring this, and although the world is actively expanding production and promoting technological evolution, it will be inevitable for the industry to integrate in the future. As a result, the current stage of product evolution and close integration between the industry chain is becoming the main trend.

Domestic industry chain hot

The hot development and accelerated landing results of the silicon carbide market are being reflected in the performance of A- share listed companies.

Tianyue Advanced (688234.SH), a domestic supplier of head silicon carbide substrate materials, recently announced that the company's net profit after deducting non-recurring gains and losses attributable to the parent company in 2023 is expected to be -0.135 billion yuan to -96 million yuan, will increase by 47.77~62.86 , I .e. 1.23~0.162 billion yuan.

The announcement pointed out that the performance change was due to the continuous expansion of the overall market size of silicon carbide semiconductors during the year, benefiting from the penetration of silicon carbide in downstream new energy vehicles, photovoltaic power generation, energy storage and other applications. In 2023, the company's Shanghai Lingang Smart Factory will open product delivery; the production capacity of conductive products will continue to increase and the product delivery capacity will be enhanced.

silicon carbide related chip and module product supplier core integration (688469.SH) announcement shows that operating income is expected to be about 5.325 billion yuan in 2023, up about 15.60 year-on-year; The net profit attributable to the owner of the parent company during the year is about -2.292 billion yuan, which will increase the loss by about 0.889 billion yuan year on year.

of course, behind the increase in losses and the company is in the rapid promotion of research and development and expansion of production action. According to the announcement, depreciation and amortization expenses are expected to be about 3.471 billion yuan during the year, an increase of about 1.39 billion yuan year-on-year. This had a significant impact on operating results during the period.

For the silicon carbide business, the company has significantly increased its research and development efforts in the SiC MOSFET and 12-inch product direction. During the period, the company carried out a large number of strategic planning and project layout in the 12-inch production line, SiC MOSFET production line, module sealing and testing production line.

The company pointed out that with the gradual release of new production capacity, the rapid increase in revenue levels, the gradual emergence of economies of scale, and the gradual digestion of depreciation, profitability will improve rapidly. it is expected that the operating income of automotive products will continue to increase, especially the speed and quantity of SiC MOSFET will increase rapidly , SiC business revenue is expected to exceed 1 billion yuan in 2024.

on January 30, core integration also announced that it had signed a silicon carbide module product production and supply agreement with weilai (nyse: NIO), which will become weilai's first self-developed 1200V silicon carbide module production supplier.

in terms of equipment, silicon carbide (SiC) diamond wire slicer manufacturer high measurement shares (688556.SH) and SiC long crystal equipment enterprise crystal shares (688478.SH) are expected to have a significant increase in 2023 performance.

the announcement shows that high test shares are expected to realize the net profit attributable to the parent company after deducting non-recurring gains and losses of 14-1.46 billion yuan in 2023, up 86.61-94.61 year-on-year . Among them, in 2023, the company's silicon carbide diamond wire slicer order size increased significantly, the market penetration rate increased rapidly.

jingsheng shares announced that it is expected that the non-net profit of the parent deduction in 2023 will be 4100~49 million yuan, up 80.52~115.74% year on year . The reason for the performance growth is the rapid development of the downstream market during the year, the company actively enriched the product sequence and application fields, the sales scale continued to expand, and the operational efficiency was effectively improved. It is reported that under the trend of 6-inch to 8-inch transformation and upgrading, Jingsheng Co., Ltd. is actively promoting the maturity and popularization and application of 8-inch SiC single crystal furnace. Its 8-inch SiC long crystal equipment is currently progressing smoothly and has passed customer batch verification.

The performance of listed companies is only a facet. As a rapidly developing emerging market, investment and financing actions are also very active.

statistics of Jibang compound semiconductor point out that from the perspective of financing rounds, most SiC-related manufacturers will complete angel round, round a and round B financing in 2023. On the one hand, this is related to the fact that the SiC industry is still in the early stages of development; on the other hand, many companies are newly established start-ups in the SiC industry in the past year.

From the perspective of the industrial chain, materials, devices and equipment are all hot spots for investment in the SiC industry. With the acceleration of iC power devices on the bus, major car companies are also actively involved in the financing of relevant manufacturers , in order to form a more in-depth binding with major SiC device manufacturers, in the product to master more initiative and voice.

looking back at 2023, from the time distribution, close to or more than 10 financing occurred in January, February, November and December, with SiC industry financing being the hottest at the beginning and end of the year. Among them, Jetta Semiconductor was not only the only manufacturer to complete one round of financing in April and September respectively, but also contributed 13.5 billion yuan to the maximum single financing amount of SiC industry in 2023.

Overseas manufacturers hold hands frequently

At present, overseas manufacturers occupy a large market share in silicon carbide substrate materials and power modules. For these manufacturers, the current position of silicon carbide will be a full range. Therefore, frequent expansion of production, promotion of higher specification products mass production landing, and active hand-in-hand with downstream are all key words.

at the performance exchange meeting held recently, Jean-Marc Chery, CEO of stmicroelectronics, introduced that in 2023, the company will continue to increase the production of front-end equipment in Catania and Singapore factories, and increase the back-end manufacturing capacity in Morocco and China factories. It also launched production at a new integrated silicon carbide substrate manufacturing facility in Catania, an important step in its vertical integration strategy for silicon carbide. In that year, stmicroelectronics announced a joint venture with Sanan Optoelectronics to promote large-scale manufacturing of 200mm silicon carbide devices in Chongqing, which is expected to start production in the fourth quarter of 2025.

"these are all important measures to further expand (stmicroelectronics) global silicon carbide manufacturing operations. drive our annual income related to silicon carbide to exceed us $5 billion by 2030. " Jean-Marc Chery said.

in 2023, stmicroelectronics will achieve silicon carbide-related revenue of $1.14 billion, up more than 60% year-on-year. Silicon carbide revenue is expected to be $15-1.6 billion in 2024, with a target of $2 billion in 2025. According to the company's expectations, its customer concentration will also decline.

The cooperation between STMicroelectronics and Sanan Optoelectronics is also considered to be an active deployment response to the huge domestic market. Previously, the company mainly supplied Tesla with silicon carbide-related devices, which also helped it lead the market share in silicon carbide devices. The introduction, its global silicon carbide MOSFET market share has exceeded 50%.

Recently, Cao Zhiping, executive vice president of STMicroelectronics and president of China, also said in an exclusive interview with a reporter from 21st Century Business Herald that the company is still iteratively optimizing silicon carbide process technology to improve the performance, scalability, and reliability of silicon carbide products. Increase production capacity to meet higher quality requirements and other growing market demands.

Infineon, another global power device leader, is also actively "holding hands" with the outside world ". On January 23, Infineon and the global silicon carbide substrate materials giant Wolfspeed announced the expansion and extension of the existing long-term 150mm SiC wafer supply agreement. The extended cooperation will include a multi-year capacity reservation agreement, which will help to ensure the stability of Infineon's supply chain and meet the growing demand for silicon carbide semiconductors in many fields.

Recently, Infineon has reached cooperation with Shenghong Electric, a head company in the energy storage field, SK Siltron CSS, a supplier of SiC wafers, and Fute Technology, a domestic vehicle power supply manufacturer. Infineon will provide Shenghong Electric with 1200V CoolSiC MOSFET power semiconductor devices, EiceDRIVER compact 1200V single channel isolated gate driver IC and other products. With Fute Technology is aimed at strengthening the depth of cooperation between the two sides in the field of semiconductor technology in the field of vehicle power supply.

The challenge of silicon carbide

The development of silicon carbide in full swing is certainly not plain sailing. At the beginning of 2023, Tesla's head Musk, who was the first to adopt silicon carbide-related power devices, suddenly announced that he would significantly reduce the use of silicon carbide by 75%, which once caused large fluctuations in the stock prices of overseas related companies.

Although it has not shown much impact at present, this undoubtedly shows that the application of silicon carbide is still facing the problem of high cost, and there is a problem of short supply. In addition, motor innovation, electric drive system improvement, packaging technology innovation are all efforts.

Therefore, the industry generally believes that the impact of silicon carbide power devices on silicon-based power devices will be partial, rather than complete replacement, depending on the specific application scenarios for power, high voltage and other specific needs. For example, some adoptSilicon carbide inverters for vehicles, and some use silicon-based IGBT inverters for vehicles.

this means that in order to accelerate the application landing, the current challenge of the silicon carbide industry chain is to rapidly increase the output, improve the application efficiency and reduce the application cost. however, some people in the industry have previously told reporters in 21st century business herald that the application of silicon carbide power devices can actually systematically reduce the application cost, which is beneficial to the energy saving and other effects of the whole vehicle.

In this regard, Cao Zhiping told the 21st Century Business Herald reporter, " Reduce manufacturing costs and improve product performance. These two points require continuous improvement and optimization. in the next three years, we have three priorities: first, upgrade the production line to 8-inch wafers; Second, implement the vertical integration strategy of the silicon carbide supply chain, including the silicon carbide substrate comprehensive factory being built in Catania factory, increasing the internal supply of silicon carbide substrates to 40%; Third, cooperate with Soitec to adopt SmartSiC technology on 8-inch wafers."

Another challenge is that the industry will move towards a period of integration when it reaches a certain stage of development. At present, all parts of the world are actively promoting the construction and investment of silicon carbide industry chain, and there are signs of overheating to some extent. After a period of time, the industry will inevitably appear too many companies and the trend of mergers and acquisitions. At that time, the core test is the current research and development, application and landing process of silicon carbide entrants.

At the beginning of 2023, some people in the industry said bluntly: the third generation of semiconductors does not need so many players, and it is not ruled out that they will take the development route similar to that of the LED industry in the future.

Although it seems a bit distant at present, it has become an important development proposition to actively cooperate with the industrial chain and promote the research and development of advanced capabilities.

Source: 21st Century Business Herald Author: Luo Yiqi