Recently, Renesas Electronics announced the termination of its silicon carbide power semiconductor production plan, shaking up the entire semiconductor industry chain. This decision not only involves an upfront payment risk of up to US$2 billion, but also reflects the deep changes in the global power semiconductor market under the multiple pressures of supply chain fluctuations, technology bottlenecks, regional competition and falling demand. Focusing on the logic behind Renesas' move, China Exportsemi will deeply analyze the current pattern and future trend of the global power semiconductor market.
1. Electric vehicle market under pressure: SiC demand is growing less than expected
The penetration rate of silicon carbide power devices in the field of electric vehicles (EVs) continues to rise, especially in high-voltage drive systems. However, from 2023 to 2024, the growth of the electric vehicle market in Europe and the United States will slow down, which will directly impact the upstream demand for SiC.
According to data released by Fuji Keizai, a Japanese market research institution, the global silicon carbide power device market size is expected to be 391 billion yen (about 2.5 billion US dollars) in 2024, a year-on-year increase of 18%, significantly lower than the previous year's 27% growth forecast. According to the IEA (International Energy Agency), in the first four months of 2024, European electric vehicle sales fell by 13.8% year-on-year, and only 155,000 units were sold in April, compared with China's pure electric vehicle sales increased by 44% to 786,000 units in the same period.
As a result of this global EV market structure, SiC manufacturers, including Renesas, with European and American automakers as their core customers, are facing a gap between expectations and reality, which weakens their willingness to promote related investments.
2. Difficult to support: supply chain dilemmas and $2 billion "bet".
Renesas signed a supply agreement with silicon carbide wafer maker Wolfspeed in 2023 and made an upfront $2 billion to secure long-term access to 150mm SiC substrates and epitaxial wafers. The original intention of the agreement was to lock in key raw material resources and build in-house SiC device production capacity. However, Wolfspeed is in financial trouble in 2024, and a number of foreign media reported that it is considering asset restructuring and potential bankruptcy protection, resulting in Renesas facing cascading risks such as the inability to recover the advance payment, the shelving of production line planning, and the sharp increase in project uncertainty.
This once again highlights that in high-threshold fields such as silicon carbide, supply chain stability is a prerequisite for commercialization, especially for system manufacturers with a low degree of vertical integration, and over-reliance on a single material supplier will be highly susceptible.
Figure: Renesas Electronics announced the termination of its silicon carbide (SiC) power semiconductor production program
3. Chinese manufacturers have sprung up: the advantages of the whole chain and price suppression
Renesas' exit coincided with the rapid rise of Chinese silicon carbide companies. According to TrendForce's 2024 report, China's SiC device shipments increased by 120% year-on-year, far exceeding the average growth rate of Europe and the United States (about 35%). This explosive growth is due to the deep integration of Chinese manufacturers in the industrial chain and the gradual maturity of manufacturing capabilities.
For example, SICC Co., Ltd. has achieved mass production of 6-inch semi-insulating SiC substrates, and the yield rate has increased to 80%; Star Semiconductor, Basic Semiconductor, Times Electric and other companies have realized closed-loop control from design, epitaxy to module packaging in the field of MOSFET and SBD devices. With the support of cost control and localization, the bargaining power of Chinese manufacturers in the global market has been significantly enhanced.
For Renesas, entering this high-input, low-margin market will mean that it will have to face the price war and customer stickiness challenges of Chinese manufacturers, and it has no decisive advantage in technology, production capacity, and channels, so giving up has become an understandable and rational decision.
4. Return of strategic focus: Focus on the advantages of core automotive MCUs
In recent years, Renesas has acquired companies such as Dialog Semiconductor, Celeno, and Panthronics, and has gradually built a platform for intelligent vehicle systems ranging from sensors, connectivity, power, and MCUs. In particular, Renesas has become a leading global supplier with a market share of more than 30% in the automotive MCU segment.
With the continuous integration of automotive SoCs, domain controllers, and power management chips, it is clear that Renesas is more inclined to strengthen its core capabilities and continue to expand its solution advantages in vertical applications such as ADAS (Advanced Driver Assistance Systems) and powertrain control, rather than venturing into silicon carbide manufacturing with high technical barriers, high capital consumption, and increasingly fierce competition.
In other words, Renesas' strategic realignment is to focus on a more profitable, vertically integrated platform business, while avoiding the risk exposure caused by the failure of upstream and downstream linkages.
5. There are still structural opportunities in the SiC market: challenges and potentials
Although the current market enthusiasm has declined, the medium and long-term growth logic of silicon carbide has not changed. SiC materials have excellent characteristics such as wide bandgap, high thermal conductivity, and high breakdown field strength, and can maintain low-loss operation under high-voltage, high-temperature, and high-frequency conditions, especially suitable for 800V electric drive systems, industrial inverters, rail transit, energy storage inverters, and other application scenarios sensitive to efficiency and energy consumption.
According to Yole Intelligence's forecast, the global SiC device market will reach more than $6 billion by 2028, with a compound annual growth rate of more than 30%. Among them, automobiles will continue to be the most important application scenario, accounting for more than 70%.
Challenges remain: first, silicon carbide substrates are difficult to produce and costly, and technology and equipment are still monopolized by European, American and Japanese companies; Secondly, the world's qualified packaging production lines are still in the expansion period, and packaging reliability and cost control are also key bottlenecks.
Therefore, the future development path of the silicon carbide industry is likely to be "polarized": on the one hand, IDM (vertical integration) giants such as Infineon, ST, and onsemi will dominate the high-end market; On the other hand, Chinese local enterprises rely on strong demand-side market and policy support to quickly cut into low-end applications and gradually extend to high-end.
6. Conclusion: Power semiconductors have entered a "new watershed".
Renesas' abandonment of SiC power semiconductor production should not simply be interpreted as a lack of technology or willingness, but rather an important signal of a transformation in the global power semiconductor landscape.
Under the interweaving of multiple factors such as geopolitics, technological breakthroughs, and the evolution of supply and demand structure, power semiconductors are gradually moving towards differentiated development: silicon-based is still the mainstream, silicon carbide and gallium nitride are competing with each other, the industry threshold is raised, and industrial integration is accelerating. Enterprises with real long-term vitality must have systematic competitiveness in market judgment, industrial collaboration, technology iteration and cost control.
Renesas' "stop loss" may be a concession to actively seek stability, but in the new round of industrial reshuffle, this strategic adjustment of focusing on the core and reorganizing resources also provides an important reference for other manufacturers. Today, when the global power semiconductor has entered the deep water area, only those companies that can flexibly respond to market changes and realize the simultaneous evolution of technology and business models can stand out in the future competition.
