Financial Associated Press, September 18 (Reporter Lu Tingting) The third-generation semiconductor material silicon carbide (SiC) continues to evolve towards larger sizes, and the 8-inch silicon carbide industry chain is also frequently bullish. Recently, the person in charge of Sanan Optoelectronics (600703.SH) revealed to the Financial Associated Press reporter that the Chongqing Sanan project (an 8-inch silicon carbide substrate supporting factory) has already lit up the substrate factory; Tianyue Advanced, a silicon carbide substrate manufacturer (688234.SH), also stated that the 8-inch conductive type has formed scale and entered mass production stage, with continuous product deliveries.

Zong Yanmin, Chairman of Tianyue Advanced, stated in today's earnings conference with Financial Associated Press reporters, "The larger the wafer, the more cost optimization can effectively control the cost of silicon carbide devices. In the next few years, with technological progress, 8-inch silicon carbide will gradually ramp up in volume."

Market analysts believe that based on cost reduction and long-term perspective, 8-inch wafers will help silicon carbide devices achieve large-scale commercialization in more application areas, driving the silicon carbide market into a new development stage.

8-inch remains popular with multiple companies disclosing new developments.

Due to cost advantages and promising application prospects, the enthusiasm for 8-inch silicon carbide layout remains high. According to statistics, there are currently over 10 companies globally investing in building 8-inch SiC wafer fabs. Lately, companies in the industry chain such as Infineon and Jingsheng Stock (688478.SH) have also successively revealed the latest progress of silicon carbide projects.

At the recent elexcon2024 Shenzhen International Electronics Exhibition, Liu Wei, Vice President of Infineon Technologies, disclosed, "We have two 8-inch silicon carbide production bases, located in Villach, Austria and Kulim, Malaysia. The wafer yield in Villach reaches or even exceeds 150mm (6 inches), with plans to fully transition to 200mm (8 inches) capacity within three years after passing quality verification; the Kulim factory is expected to start producing 200mm-based products as early as the first quarter of 2025."

Regarding substrates, the Financial Associated Press reporter learned from Sanan Optoelectronics securities department as an investor that Hunan Sanan's wholly-owned subsidiary Chongqing Sanan matches production of 8-inch silicon carbide substrates supplied to STMicroelectronics. Their staff mentioned that the Chongqing Sanan project has already started operations with equipment running, but the factory's scale will only be enlarged when the corresponding chip and epitaxial factory also commence operations.

Regarding future expansion, the aforementioned employee of Sanan Optoelectronics revealed, "We have stopped expanding 6-inch production in Hunan, and will expand to 8 inches in the future."

In addition, Tianyue Advanced has currently established two major silicon carbide semiconductor material production bases. Zong Yanmin stated that the company plans to further expand the 8-inch silicon carbide substrate production capacity at Lingang factory, with continuous increase in production and sales of 8-inch products.

Data shows that Tianyue Advanced achieved revenue and net income of 0.912 billion yuan and 0.102 billion yuan in H1 respectively, with year-on-year growth of 108% and 241%. When asked about the performance contribution of mass production of 8-inch related products, a personnel from the company's securities department stated, "This is partly due to the steady increase in production capacity planning at our Shanghai Lingang factory."

During today's semi-annual performance briefing, Tianyue Advanced mentioned that one of the reasons for the continuous growth in performance is the strong demand in the field of high-quality automotive-grade silicon carbide products. The interim report shows that the company's conductive product capacity and production continue to increase, and the delivery capability of products is also increasing.

In terms of equipment, the first batch of 8-inch silicon carbide ingot growth equipment from Zhisheng Holdings was delivered in Chongqing in July this year; Hunan Yujing Machinery (002943.SZ) currently has 8-inch silicon carbide substrate cutting and polishing equipment available in the market.

Significant cost reduction effect, market share expected to grow rapidly.

Zong Yanmin told Caijing magazine reporters, "Currently, the market is still mainly dominated by 6-inch wafers. The development of silicon carbide wafers towards 8 inches is a common trend in the semiconductor industry."

Previously, TrendForce's data showed that the market share of 8-inch products is less than 2%, and it is predicted to grow to around 15% by 2026.

From 4 to 6 inches to 8 inches, an industry insider told Caixin that there will be a cost decrease when discussing product advantages with reporters from China Fortune. However, the yield, technological improvement, and economies of scale will drive down the cost of silicon carbide substrates.

According to SiC substrate manufacturer TIANKEHEDA, the upgrade from 4 inches to 6 inches is expected to reduce the unit cost by 50%; and from 6 inches to 8 inches, the cost is expected to decrease by another 35%.

"The demand outlook for silicon carbide is broad. With technological breakthroughs and cost reductions, silicon carbide power devices will be widely used in electric vehicles, charging stations, photovoltaic new energy, and other fields. It has enormous potential in areas such as power devices for new energy vehicles, communication base stations, photovoltaic inverters, and high-frequency communication systems." CINNO Research senior analyst Wang Jing said.

In fact, the rapid development of new energy vehicles, wind and solar energy storage, and other fields has significantly driven the growth of silicon carbide demand, benefiting industry manufacturers. In the first half of this year, sanan optoelectronics, and Jingsheng shares' silicon carbide related business segments provided important incremental performance.

However, there are still obstacles in the advanced development of silicon carbide products. Liu Wei said that from industry reports and actual market demand, the development of silicon carbide is growing rapidly. However, behind this growth, due to the different application scenarios, silicon carbide products face cost, reliability, and robustness challenges at the design level; for example, short-circuit tolerance, high-temperature tolerance, harsh environments, and robustness under dynamic load conditions.

Wang Jing also mentioned that from 6 inches to 8 inches, the path to cost optimization can be achieved through economies of scale, equipment optimization, and process improvements.

Currently, domestic silicon carbide substrates and epitaxial products have been basically localized, but compared with international companies, the yield and cost control of 8-inch SiC substrates still need to be improved. At the same time, there is a significant release of domestic silicon carbide production capacity, posing a risk of oversupply, according to Wang Jing's analysis.