According to market research, the revenue of the global silicon carbide (SiC) substrate market in 2024 will decrease by 9% year-on-year to $1.04 billion.
From the analysis of market demand, the weakening demand in the automotive and industrial sectors in 2024 is one of the key reasons for the slowdown in the growth of silicon carbide substrate shipments. In the automotive industry, although the new energy vehicle market has developed rapidly in recent years, the production and sales growth rate of new energy vehicles will decline in 2024 due to factors such as the macroeconomic environment and subsidy policy adjustments. Silicon carbide substrates have important applications in key components such as inverters for new energy vehicles, and fluctuations in automobile production directly affect the demand for silicon carbide substrates. The same is true for the industrial sector, where global economic uncertainty has made industrial companies more cautious in equipment upgrades and expansions, and the purchase of power electronic equipment related to silicon carbide substrates has decreased, which in turn has suppressed the market demand for silicon carbide substrates.
Increasing competition in the market and significant price reductions have also negatively impacted global revenue for silicon carbide substrates. In recent years, the market prospect of silicon carbide has gradually been optimistic, and more and more companies have entered this field, resulting in increasingly fierce market competition. In order to compete for market share, many new entrants have adopted price competition strategies. This price war has caused the price of silicon carbide substrate products to decline sharply, and the profit margins of enterprises have been compressed. Taking some small and medium-sized enterprises as an example, they are inferior to the leading enterprises in the industry in terms of technology and brand influence, and can only rely on low prices to attract customers, which further lowers the average market price.
Although the silicon carbide substrate market is facing the dual pressure of weak demand and oversupply from 2024 to 2025, its growth prospects are still very promising in the long term. In terms of cost, with the continuous progress of technology, the production process of silicon carbide substrate has gradually matured, the production efficiency has been improved, and the unit production cost will be gradually reduced. The cost reduction will not only help improve the profit margins of the company, but also allow the silicon carbide substrate to be competitive in more price-sensitive markets, thereby driving market demand growth.
image: 2024 N-type SiC substrate revenue market share
The development of semiconductor device technology has also brought new opportunities to the silicon carbide substrate market. With the iteration of technology, the advantages of silicon carbide substrate in performance are becoming more and more obvious, which can meet the application requirements of higher power and higher frequency. In addition to the existing automotive and industrial fields, the application of silicon carbide substrates in emerging fields such as 5G communications, data centers, and aerospace is also expanding. In the construction of 5G base stations, silicon carbide power devices can improve energy efficiency and reduce the energy consumption of base stations; In data centers, it helps to improve the conversion efficiency of server power and reduce operating costs.
From the perspective of market competition pattern, the four major manufacturers will occupy 82% of the market share in 2024, and the industry concentration is high. Despite operational challenges, Wolfspeed maintains its leading position with a 33.7% market share, a deep technology footprint in the silicon carbide materials market, and a key role in driving the industry's transition to 8-inch wafers. Chinese manufacturers TanKeBlue and SICC are growing rapidly, ranking second and third with market shares of 17.3% and 17.1%, respectively. TanKeBlue has an advantage in terms of supply in the domestic power electronics market, while SICC is leading in the field of 8-inch silicon carbide wafers. The formation of this competitive pattern is, on the one hand, due to the first-mover advantage of leading enterprises in technology research and development, production scale and brand influence; On the other hand, emerging companies have gradually gained a firm foothold in the market through continuous technological innovation and localized services, accelerating the competition and integration of the industry.
In terms of technology development path, although the current 6-inch silicon carbide substrate still dominates in the short term due to factors such as the sharp decline in price and the technical challenges of the 8-inch front-end process, 8-inch wafers are crucial to further reduce costs and improve chip performance, and are an important direction for the future development of the industry. In order to occupy an advantage in the future market competition, major companies have increased investment in 8-inch silicon carbide substrate technology research and development and production equipment. TrendForce predicts that 8-inch silicon carbide substrates will account for more than 20% of total shipments by 2030, which fully demonstrates the trend and great potential of the industry's technology development.
The revenue decline in the global silicon carbide substrate market in 2024 is only a short-term phenomenon, and it is a phased performance in the process of market adjustment and technology iteration. With the reduction of costs, the expansion of application fields and the continuous progress of technology, the silicon carbide substrate market is expected to usher in a broader development space in the future and occupy a more important position in the semiconductor industry.
