Silicon Carbide: A New Opportunity for the Development of the Power Semiconductor Industry

Power semiconductors—also known as power electronic devices—are critical components in power electronic systems, used for electrical energy conversion and current control. They find applications in a wide range of power transmission and utilization scenarios, including power supplies, motor control, renewable energy systems, power transmission, and electric propulsion.

In 2019, the global power semiconductor market was valued at approximately US$40 billion, with an average compound annual growth rate of 5.1% over the past five years. Among these, China is the largest market, accounting for nearly 40%.

The semiconductor materials used in power devices are divided into three generations:

The first-generation semiconductor materials are elemental substances such as silicon (Si) and germanium (Ge). Due to their mature manufacturing processes and low production costs, silicon accounts for more than 95% of semiconductor devices and is currently the dominant semiconductor material.

The second-generation semiconductor materials are compound materials such as gallium arsenide (GaAs). Gallium arsenide semiconductors boast high electron mobility and a wider bandgap than silicon, giving them advantages like high breakdown voltage and high operating frequency. However, they also have drawbacks, including low mechanical strength, susceptibility to decomposition at high temperatures, slow growth rates, and high cost. Currently, they are mainly used in optoelectronic applications such as LEDs.

Third-generation semiconductor materials include wide-bandgap materials such as silicon carbide (SiC) and gallium nitride (GaN).

Improving energy efficiency (reducing energy consumption and losses) is a key direction for advancements in power semiconductor technology. The ideal goal is for power semiconductors to consume zero power when conducting and to have zero leakage current when turned off. Currently, according to a report by the IEA, global electricity losses account for 20% of total electricity generation—a significant waste from both economic and environmental perspectives. However, power semiconductor devices made from conventional silicon materials have already reached the theoretical limit of energy conversion efficiency.

Represented by silicon carbide and gallium nitride, third-generation semiconductor materials have emerged as the next-generation technological direction for power semiconductors. According to the China Third-Generation Semiconductor Industry Technology Innovation Strategic Alliance, the performance advantages of third-generation semiconductor materials include: high electron drift velocity, which can reduce power consumption during energy conversion and improve energy utilization efficiency; a wide bandgap and high critical breakdown voltage, which decrease the number of components required in high-voltage operating systems, thereby promoting system miniaturization and weight reduction; and high thermal conductivity, which reduces the need for cooling systems.

Compared to gallium nitride, silicon carbide is better suited for power systems operating at voltages above 1,000V, including high- and medium-voltage applications such as electric vehicles, charging stations, new-energy power generation systems, and high-speed rail traction systems. Once the technology for fabricating gallium nitride devices using silicon substrates matures, these devices will become more cost-effective relative to silicon carbide devices that rely on homoepitaxial substrates. In the future, in medium- and low-voltage applications, devices made from silicon carbide and gallium nitride materials will likely compete with each other.

Currently, silicon carbide devices are primarily used in power supplies and photovoltaic inverters, as well as in limited applications within the electric vehicle industry. The major potential application markets remain largely untapped.

Between 2017 and 2019, the global silicon carbide power device market experienced an average compound annual growth rate of 39.7%. In 2019, the market size reached US$507 million, yet market penetration remained at just 1.27%, signaling the emergence of early signs of a promising trend.

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Future Growth Potential: The rising demand for new-energy vehicle applications will drive growth in the silicon carbide device market.

Public information from various sources is fairly optimistic about the growth of the silicon carbide device market. It is estimated that by 2025, the global silicon carbide device market will exceed 3 billion U.S. dollars, with an average compound annual growth rate of as high as 34.5% over the next five years, and it is expected to continue growing thereafter.

From the perspective of growth drivers and downstream demand, in the foreseeable future, new-energy vehicles—including their accompanying charging stations—will be the largest application scenario for silicon carbide devices, accounting for at least 50% of total demand, with a growth rate far exceeding that of other markets.

Looking at the breakdown, currently, silicon carbide devices in electric vehicles are mainly used in on-board chargers (OBCs) and DC-DC converters, helping to increase the charging speed of cars. By the end of 2018, more than 20 automakers worldwide had already adopted silicon carbide devices in their OBCs. However, the market’s value potential remains relatively limited.

The application of silicon carbide devices in electric vehicle drive motors and inverters—i.e., their powertrain—can significantly boost driving range, and the potential scale of such applications far exceeds that of other uses. By integrating silicon carbide devices into drive motors, we can not only reduce electrical energy losses and enhance power control but also shrink the size of the equipment by about 50% and lighten its weight. As a result, vehicle range can increase by 5% to 10%, or battery costs can be reduced by a corresponding 5% to 10%—roughly translating to $200 to $600 per vehicle. Moreover, using silicon carbide devices can also lower cooling system costs and extend the service life of power batteries, making it a win-win solution with no downsides. A rough estimate suggests that the potential value of silicon carbide devices used in each electric vehicle’s drive motor could exceed the current market value of existing applications by more than tenfold.

The trend toward using silicon carbide devices in drive motors has become clear. Currently, most automakers plan to incorporate silicon carbide devices into their main inverters over the next few years. Due to cost considerations, silicon carbide devices are initially being deployed in high-end electric vehicles. Tesla is a pioneer in the application of silicon carbide devices; its Model 3 drive motor is equipped with 24 silicon carbide MOSFET modules rated at 650V/100A. In 2020, BYD introduced the Han (high-performance version), which features silicon carbide MOSFET-based motor control modules. Foreign component suppliers such as Bosch, ZF, and Delphi have also launched R&D programs for silicon carbide electric-drive systems. Moreover, the increasing voltage levels in power systems mean faster charging speeds. Starting with the Porsche Taycan, as the voltage platform of high-end electric vehicle battery packs has been upgraded from 400V to 800V, the demand for silicon carbide modules will shift from 650V to 1200V.

In addition, the application of silicon carbide devices in the charging-station market is also set to grow rapidly. The increasing popularity of new-energy vehicles will drive demand for charging infrastructure, and currently, there is a significant gap both domestically and internationally. Due to their superior performance, silicon carbide devices are widely used in high-power DC (fast-charging) charging stations.

In addition to new-energy vehicles, high-voltage devices tailored for specific applications such as rail transit and ultra-high-voltage power grids are currently still under development and are expected to become commercially viable after 2025.

However, since the manufacturing process for silicon carbide is more complex and offers higher added value, downstream customers primarily use it in applications with high cost-effectiveness. It is therefore unlikely to replace silicon in low-end applications.

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Technology development trends: The industry is breaking through two major barriers to growth—high costs and low technological maturity.

As mentioned above, silicon carbide devices boast outstanding performance advantages, have clearly defined application scenarios, and are actively supported by leading companies across the upstream and downstream segments of the industry chain. Yet, their current market penetration remains low. The root cause lies in two major barriers: high manufacturing costs and low technological maturity. Overcoming these two obstacles is central to the direction of technological development. Each of the four key stages in silicon carbide device manufacturing—substrate fabrication, epitaxy growth, chip processing, and packaging & testing—offers significant opportunities for advancement.

1) The manufacturing cost of silicon carbide devices is high. Currently, the cost of silicon carbide diodes and MOSFETs is roughly 2 to 3 times that of their silicon counterparts, and in some cases even 5 to 10 times higher. However, downstream customers believe that the widely accepted price range for large-scale adoption of silicon carbide devices should be around 1.5 times that of comparable silicon devices. The primary factor driving these high costs is the high price of raw materials—especially the substrate wafers, which account for about 50% of the cost of standard silicon carbide devices.

The properties of silicon carbide raw materials determine that their fabrication is more challenging and costly than that of silicon wafers. In terms of fabrication temperature, silicon carbide substrates must be produced in high-temperature equipment operating at 2,500 degrees Celsius, whereas silicon wafers require only 1,500 degrees Celsius. As for production cycles, silicon carbide wafers typically take about 7 to 10 days to manufacture, while silicon ingots can be produced in just two and a half days. Regarding commercial wafer sizes, silicon carbide wafers currently come mainly in 4-inch and 6-inch diameters, whereas silicon wafers used for power devices are predominantly 8 inches in diameter. This means that a single silicon carbide crystal yields fewer chips, resulting in higher manufacturing costs for silicon carbide chips.

Technology evolution direction: In terms of substrates, leading overseas companies are expected to begin mass production of 8-inch wafers around 2022. In the areas of epitaxy and devices, capacity and yield rates will continue to be improved.

2) The silicon carbide industry has not been developing for a long time and still requires further validation through more applications. Unlike the silicon industry, which has accumulated a comprehensive set of data over decades of research, many performance conclusions about silicon carbide have been derived from extrapolations based on silicon’s properties. As a result, numerous characteristic data points remain to be further substantiated empirically.

Moreover, the product portfolio of silicon carbide power devices is still incomplete. Looking at the overall power semiconductor market, there is a wide variety of power devices, including diodes, MOSFETs, and IGBTs, each suited for different applications. However, currently, the silicon carbide device market is dominated by diodes; MOSFETs have yet to be widely adopted, and IGBTs are still under development. Silicon carbide diodes are primarily used as replacements for silicon diodes. With their relatively simple structure, they have already been commercialized on a large scale. In 2019, silicon carbide diodes accounted for 85% of the silicon carbide device market, making them by far the most prevalent type of silicon carbide device today. Silicon carbide MOSFETs can replace silicon-based IGBTs, but their large-scale adoption remains constrained by issues related to product performance stability and device maturity. As for silicon carbide IGBTs, they are still in the R&D phase and it is expected that prototype devices will not become available for another 5 to 10 years.

Technology evolution direction: In terms of devices, we are developing high-voltage devices rated above 3.3 kV and introducing trench-based designs to enhance device performance and reliability. In terms of packaging, we will optimize packaging processes to fully leverage silicon carbide’s advantage of high-temperature resistance.

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Recommendations for Promoting the Development of Domestic Industries:

Strengthen top-level design, formulate plans, concentrate resources, develop technologies, and solidify the foundation.

· Develop strategic plans, outline technology development roadmaps, and explore approaches and methods for pooling resources from various stakeholders.

· Mobilize government and capital resources to foster industrial clusters, concentrate and optimize innovation resources, and pool efforts to overcome technological bottlenecks in equipment, materials, and devices.

· Strengthen basic research and encourage original innovation to provide industries with talent, technology, and creative input.

Improve the foundational platforms for public R&D, services, and production applications across the industrial chain.

· Build an open national innovation technology center and an internationalized public R&D and service platform to tackle core technologies and enrich innovation resources.

· Build a testing, validation, and application demonstration platform; refine product testing processes; assist enterprises in innovating applications; and strengthen system-level capabilities centered on application deployment.

Improve the industrial ecosystem and focus on key areas such as talent, technology, applications, and international cooperation.

· Improve the talent development system and cultivate leading talents in areas such as entrepreneurship, innovation, and engineering technology.

· Build an open and orderly technical standards system, strengthen patent operations, and actively participate in the formulation of international technical standards.

· Promote international cooperation, enhance scientific research exchanges with overseas industry, academia, and research institutions, and facilitate the establishment of overseas technology R&D and innovation centers.