[Core Information] The silicon carbide track is accelerating its involution, and the leading original manufacturers are increasing their vertical integration to seize the long-term pattern.

Xiaomi cars become popular800V SiC high voltage platform, silicon carbide has become a standard core device for new energy vehicle companies to improve their product capabilities.As the penetration rate of electric vehicles continues to increase, there is a critical window period for superimposing SiC wafers to iterate from 6 inches to 8 inches. The world's leading power semiconductor manufacturers are making efforts.From substrate - epitaxy - wafer manufacturing - chip design - packaging and testing modulesThe entire chain is vertically integrated to tackle yield rates, release production capacity, and lock in cost advantages. The industry is rapidly entering the red ocean competition stage.

1. Global SiC landscape: the top five manufacturers monopolize 91.9% of the market

2. STMicroelectronics ST: 8-inch vertical integration leader, ranking first in the world

ST with32.6% market shareRanking first in the global SiC market and accelerating global production capacity layout:

1. 8-inch SiC Gigafactory in Catania, Italy
   With a total investment of 5 billion euros and a subsidy of 2 billion euros from the EU chip bill, it will create Europe’s first8-inch SiC one-stop vertical integration base, covering the entire process of substrate, epitaxy, wafer manufacturing, packaging and testing, and R&D laboratories; it will be put into production in 2026 and will be fully loaded in 2033, with a maximum production capacity of15,000 tablets per weekwafer.

2. Global multi-base collaboration

   Existing two 6-inch production lines in Italy and Singapore; joint venture with Sanan OptoelectronicsChongqing 8-inch SiC factoryIt is the third largest production center; its Swedish and Italian bases independently supply SiC substrates.

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4. 8-inch technology first

   In 2021, 8-inch SiC wafers have been successfully trial-produced, nearly doubling the production capacity compared to 6-inch; relying on vertical integration to achieveCapacity, yield, costTriple advantages to consolidate its leading position in the industry.

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3. ON Semiconductor: Acquisitions to complete the industrial chain, and the 8-inch rhythm is steadily advancing

1. Capital layout: In 2021, it will spend US$412 million to acquire GTAT, a major SiC material manufacturer, to directly supplement theSubstrate self-developed and producedcapabilities and open up the foundation of the entire industry chain.
2. Capacity expansion: Invested US$2 billion to upgrade the Czech factory to create a vertically integrated SiC production base; the large-scale SiC factory in Bucheon, South Korea has been completed, initially focusing on 6 inches. It will switch to mass production after completing the 8-inch process verification in 2025. After full production, the annual production capacity is equivalent to more than 1 million silicon wafers.

3. technical rhythm: The 8-inch SiC substrate has been sampled, certified in 2024, and shipped on a large scale in 2025, keeping pace with the industry's size upgrade wave.

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4. Vertical integration becomes the core key to SiC cost reduction

• Improve the self-supply rate of substrates and get rid of dependence on external supply;
• Leverage the 6-inch to 8-inch window period to amplify the scale effect, double the output of a single chip and dilute the unit cost;

• Independently control process yield and shorten the iteration cycle of R&D and mass production.

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5. Restructuring of the industry structure: Wolfspeed is under pressure, and domestic substrates are facing opportunities

1. Wolfspeed faces challenges

   As the leader in traditional SiC substrates, German factory construction has been forced to slow down due to the substitution of independent substrates by major manufacturers and the pressure on its own capital investment. Large external customers have built their own supply chains, and market share and profit margins continue to be under pressure.
2. Infineon supply chain diversification

   We have not completely built our own substrate yet. We are importing it while maintaining our cooperation with Wolfspeed.Tianke Heda, Tianyue AdvancedDomestic SiC substrate manufacturers such as SiC have not only lowered procurement costs, but also further impacted the traditional substrate giant structure.
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6. Summary of the industry outlook