The third generation semiconductor battle is fierce!

jack July 04, 2024

At present, the third generation of semiconductors is the new commanding heights of global strategic competition, and it is also the key support industry in various regions, stmicroelectronics, Infineon, Anshi Semiconductor, SAN 'an Optoelectronics and other head manufacturers to follow the trend, accelerate the layout of the third generation of semiconductors, the market war has been burning, a group battle is being staged.

Multiple parties to fight, "straight" three and a half core links

The third-generation semiconductor industry is thriving, with various players entering the market and competing for key positions to seize a significant growth opportunity. The industry believes that, in response to the explosive demand from downstream sectors, improving processes and yields, as well as expanding wafer production capacity, is the top priority.

With a tight supply of third-generation semiconductor production capacity, major companies like Sanan and STMicroelectronics are leading the charge. Infineon plans to invest 7 billion euros (approximately 54.424 billion RMB) to expand capacity in Malaysia. Its Kulim Module 3 facility is expected to be operational in August this year, with SiC production starting by the end of 2024. Nexperia is investing 200 million USD (approximately 1.45 billion RMB) to develop next-generation wide bandgap semiconductors (WBG) such as silicon carbide (SiC) and gallium nitride (GaN), and is setting up production infrastructure at its Hamburg plant in Germany. Wolfspeed's Building 10 Materials factory has achieved its 8-inch wafer production target, and its Mohawk Valley SiC wafer plant is expected to increase wafer utilization to about 25% by the end of 2024.

Sanan Optoelectronics and STMicroelectronics have decided to jointly establish a new 8-inch silicon carbide device manufacturing plant in Chongqing, China, announced in June last year. Currently, the main equipment has arrived at the Chongqing Sanan substrate factory, marking the countdown to the factory's production commencement. The total planned investment for the Sanan-STMicroelectronics SiC project is about 30 billion RMB. Once fully operational, it will be the first 8-inch SiC substrate and wafer manufacturing line in China, with an annual output capacity of 480,000 8-inch SiC substrates and automotive-grade MOSFET power chips, generating an estimated revenue of 17 billion RMB. This will significantly contribute to Chongqing's ambition to become a hub for third-generation compound semiconductors.

Additionally, the first phase of Sanan Semiconductor's silicon carbide industrialization project in Hunan has been fully launched, with an annual SiC capacity of 250,000 wafers (6-inch equivalent). The second phase is progressing steadily, incorporating internationally leading 8-inch production equipment and processes. Upon completion, the total annual production capacity will reach 480,000 wafers. Sanan Optoelectronics recently stated on the investor interaction platform that the subsequent expansion of the Hunan Sanan project will focus on producing 8-inch SiC products. Currently, the 8-inch SiC substrates have begun trial production, and 8-inch SiC chips are expected to start production in December.

South Korea Advances in GaN:

According to recent reports from Korean media, Samsung Electronics, SK Siltron, DB HiTek, and fabless ABOV Semiconductor have jointly signed a Memorandum of Understanding (MOU) for a semiconductor business agreement. They are collaborating on the "Compound Power Semiconductor Advanced Technology Development Project," which will initially focus on the development of GaN power semiconductors. These companies have expressed their aim to commercialize the GaN business.

In earlier developments, Samsung revealed plans to begin constructing an 8-inch GaN compound power semiconductor foundry starting in 2025. SK Siltron, through its subsidiary SK KeyFoundry, is developing and mass-producing GaN semiconductors. SK KeyFoundry announced it has already achieved 8-inch 650V GaN HEMT device characteristics and plans to complete development within this year. DB HiTek announced in May that it will introduce the necessary equipment for GaN device production in the third quarter of this year and complete preparations for mass production by the end of the year, with the GaN foundry expected to begin operations early next year.

Additionally, the South Korean government is strengthening support for this industry. From this year until 2028, the government plans to provide 138.5 billion KRW (approximately 720 million RMB) in funding to advance these projects, including 93.9 billion KRW in government funds and 44.6 billion KRW in private investments. In terms of technical support, the Korea Institute for Technology Innovation and Evaluation (KITIE) will provide R&D support to participating organizations.

Automakers Strategize to Stabilize Supply Chains:

China FAW is enhancing its silicon carbide projects: its M220 SiC electric drive was announced to have commenced mass production this year, and the M190-150 (SiC) electric drive production preparation project is in the approval stage. The M220 SiC electric drive is a core component of FAW Hongqi’s HME platform, matching five main new energy models including EH7, E202, and E702. It is also one of the first mass-produced powertrain products after the CEO system reform of the product project. Once the M190-150 (SiC) electric drive production preparation project is completed, it will achieve a combined annual capacity of 200,000 units for the M190-150 (SiC) and M220 electric drive systems, with the M190-150 (SiC) electric drive system accounting for 140,000 units per year.

Some Manufacturers Accelerate Project Progress and Product Shipments:

Xinta Electronics has delivered large quantities of SiC modules, and its Huzhou power module packaging production line, with a total investment of 100 million RMB, will be officially operational in early 2024. It is currently in the mass production ramp-up stage. Once fully operational, the production line will have an annual capacity of 1 million power modules, with an estimated annual output value of 300 million RMB. Guanlan New Materials has signed a project for the annual production of 1600 tons of silicon carbide substrate materials. The company’s main products include large-size, high-purity, low-cost third-generation semiconductor SiC raw materials and SiC coatings. The domestic raw materials have been verified and certified by multiple customers both domestically and internationally. Zhongshuntongli Semiconductor has signed a project with a total investment of 5 billion RMB, planning to build a packaging and testing production line for special and automotive-grade power devices, as well as a corporate headquarters cluster.

Meanwhile, M&A Activities Intensify:

Companies are expanding aggressively, with multiple acquisitions in the silicon carbide and gallium nitride fields. Pure-play foundry GlobalFoundries acquired GaN developer Tagore, including its proprietary and production-verified GaN power technology and IP product portfolio. Guerrilla RF acquired Gallium Semiconductor’s GaN power amplifier and front-end module product portfolio, and the company plans to develop and commercialize new GaN device product lines for wireless infrastructure, military, and satellite communication applications.

Conclusion

Third-generation semiconductor materials are demonstrating their superior performance in fields such as new energy vehicles, information and communications, rail transit, and smart grids. They have become a crucial engine driving innovation and upgrading across various industries. However, fundamental research capabilities, key equipment, and raw materials related to the industry and supply chain security remain critical issues. Consequently, the industry has seen a flurry of activity this year, with upstream, midstream, and downstream manufacturers implementing forward-looking strategies. The industry believes that the era of third-generation semiconductors is at our doorstep.

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