Analyst of the fourth industrial reports: IGBT and SiC will be promising

Many semiconductor giants successively released their?earning reports?for the fourth quarter?last week.?On the whole, these reports?showed a downward trend in revenue and even a loss.

Its operating income fell by 11% month-on-month and 3% year-on-year, according to the fourth-quarter financial report released by Texas Instruments (TI) on January 31.?"Our performance reflects weak demand in all end markets except automobiles?as expected,"?president Rich Templeton said bluntly.

Intel's revenue in the fourth quarter of 2022 slipped by 32% year-on-year while its full-year income in 2022 was down 20% year-on-year. The revenue from Data centers and artificial intelligence as Intel’s core businesses decreased by 33% year-on-year in the fourth quarter, and by 15% for 2022.

Samsung Electronics’?revenue was a reduction of 8% year-on-year in the fourth quarter, of which the semiconductor business quiet sharply slashed 96.9%. However, Samsung stated that it will rarely cut capital expenditure on chip production, plant and equipment. The company even plots to increase chip production capacity at its largest semiconductor factory [the P3 factory in Pyeongtaek, South Korea] in 2023.

STMicroelectronics(ST), against the sluggish operating income, has achieved an extraordinary scores in 2022 with a 26.4% growth in revenue, a rise in operating profit margin from 19.0% to 27.5%, and a doubling of net income. The outperformance is inseparable from the strong demand of the automotive and industrial markets in the new era as well as the improvement of its own production capacity. As said before, demand was sagging in all end markets except automotive. Automaker Tesla (Tesla), as one of ST’s largest customers and one of the giants of new energy vehicles, has a strong dependence on the chip supply chain, bringing up ST performance.

As the penetration rate of new energy vehicles continues to rise, it will exceed 18% globally by the end of 2022. In 2022, the global new energy vehicles will maintain a high growth trend, with a total sales of about 10.59 million vehicles, a year-on-year increase of about 72%. Governments around the world are actively promulgating a variety of preferential policies to mainly promote new energy vehicles. Furthermore, the technology in new energy vehicles is constantly enhancing and infrastructure is steadily advancing, which makes new energy vehicles prosperous in the short term or the long term. The scale of the global chip market gets increasing with an expectation of maintaining the up trend in the coming years in terms of the Prospective Industry Research Institute.

IGBT

The high-performance?Insulated Gate Bipolar Transistor?(IGBT), as one of the?central?components of the electronic control system?in?new energy vehicles,?is used in a very high amount.?The main applications of IGBT?in new energy vehicles include motor controllers and?on-board?chargers(OBC), on-board air conditioners, and DC charging piles for new energy vehicles.?In addition to be applied in new energy cars filed, IGBT?is?widely?utilized?in industrial manufacturing and photovoltaic?areas.?Currently,?overseas giants led by Infineon, Fuji Electric and Mitsubishi Electric?(The top ten global IGBT?companies?in 2020:?Infineon, Fuji Electric, Mitsubishi Electric Corp., Onsemi, Toshiba, STMicroelectronics, Littelfuse,?Renesas, Magnachip, Silan),?firmly grasping the global market with a combined market share of 54.5%.

Industrial control?accounting for?as?huge demand for?IGBT?as new energy vehicles, is another promising area. IGBT is the?key?component of traditional industrial control and power supply industries such as?variable-frequency?drive,?arc?inverter welding machines, UPS power supplies and electromagnetic heating.?The growth rate?of industrial control, though,?is not as high as that of the new energy vehicle.?The?needs?for IGBTs in industrial control?are?more long-term and stable?in the light of?long-term development and their respective characteristics.

The companies outside China?have an absolute competitive advantage in this type of high-tech,?high-value-added?and?mid-to-high-end products because the firms in China are constrained by devoid of high-level technology and corresponding market for IGBT.?Therefore, customers will be more conservative and stable in choosing IGBTs.

SiC

Silicon carbide (SiC) is?the other material?with broadly?increasing?space, as a representative of the third generation of semiconductor materials. It?embodies?the characteristics of high breakdown electric field,?high saturated electron drift velocity, high thermal conductivity, and high radiation resistance.?SiC?chips, an advanced power semiconductor, are mainly used in electric vehicles.

The long-term shortage will?happen?in extremely niche areas such as silicon carbide power electronics.?The?insufficiency?of silicon carbide chips will?last?at least until the end of 2023. Now SiC is?highly?scarce. Wingtech Technology said that it is optimistic about the medium and low voltage vehicle market around 400V. The market?will?be?covered?with IGBT and GaN, while SiC will mainly focus on the market above 800V. The world's leading SiC device suppliers, including ST, Infineon, Wolfspeed, ON Semiconductor, Rohm, etc., have successively purchased and invested in different high-quality SiC substrate suppliers,?building?in-house substrate supply from?vetically integrating?SiC substrate to device manufacturing. At present, there are?more common?phenomena that a device manufacturer may?cooperate with?multiple SiC substrate manufacturers for supply, which?is arose by?the strong expectation of the explosive growth of the SiC market?while?the current SiC production capacity?could not?be rapidly increased.

Semiconductor manufacturer Wolfspeed plans to cooperate with?ZF an?automotive?parts suppliers,?establishing?a semiconductor factory in Saarland, Germany. The total investment of the plant may?be?$3 billion. It is?intended?to be put into operation in 2027 and full production in 2030,?with a projection of?being?the world's largest silicon carbide semiconductor factory. The products will mainly?be utilized in?electric vehicles,?photostatic?and?something like that. Wolfspeed's silicon carbide substrate?owns?the largest market share in the world, and ZF has begun to use silicon carbide components in mass-produced 800V inverters.

Analyst of the fourth industrial reports: IGBT and SiC will be promising - 伯仲電子 (randa.hk)