Source: Content compiled from yole

Several SiC players have announced plans to expand production capacity in the coming years to meet demand for end systems, especially automotive. Leading equipment manufacturers such as STMicroelectronics, ON Semiconductor, Infineon, Wolfspeed and ROHM are building factories in various locations. In the latest quarter, manufacturers' investment status has been updated. At the SiC wafer and epiwafer level, massive capacity expansions set up strong growth in 2023, especially in China. However, this has also resulted in overcapacity for SiC materials.

Additionally, the 8-inch SiC platform enables technology scaling, resulting in significant cost reductions. Since opening in 2022, Wolfspeed's MHV fab has continued to ramp up production. More device manufacturers plan to start volume shipments in H2-24. The SiC market will face lower growth in 2024 given the slowdown in the electric vehicle market. Supply chains are destocking in the first half of 2024, with recovery expected in the second half of 2024 and stronger growth in 2025. In this monitor, we provide scenario analysis based on current technology and market trends, as well as our forecasts for the next five years.

Regarding the power GaN market, Infineon Technologies' $830 million acquisition of GaN Systems is the largest deal in the industry to date. Another big news last year was Renesas Electronics' $339 million acquisition of Transphorm. The industry is consolidating and is expected to transform into an ecosystem dominated by IDM business models. Additional mergers and acquisitions are expected, and new players may enter the power GaN market with different backgrounds and strategies.

However, the power GaN industry has also faced setbacks, including the bankruptcy of Belgian GaN foundry BelGaN, which highlights the challenges and the need for significant investment in a market that still lacks immediate return on investment. Overall, the power GaN market will grow at a CAGR of 41% to exceed $2 billion by 202923-29, attracting increasing attention. Over the past two years, the industry has announced more than $1.6 billion in investment, including mergers and acquisitions and other financings.

01 SiC and GaN have become a key part of the power semiconductor industry

SiC and GaN continue to grow rapidly, which started in 2018-2019, but the drivers are different. Initially, disruptive automaker Tesla adopted SiC in its inverters. But now, another trend is reshaping the electric vehicle (EV) market, namely fast 800V EV charging, which reduces charging time. SiC is the driving factor, with good performance and an evolving supply chain.

As of 2023, high-volume electric vehicles using SiC, including BYD's Han and Hyundai's Ioniq5, are shipping. Leading device manufacturers such as STMicroelectronics, ON Semiconductor, Infineon, Wolfspeed, and ROHM once again achieved record revenues in 2023.

Despite slowing BEV growth in 2024, SiC device manufacturers still expect revenue growth in 2024, with the entire market reaching nearly $10 billion by 2029. In addition to automotive, industrial, energy, and railway applications now provide additional growth drivers. Capacity construction, business consolidation, and new business models will take SiC to another level in the coming years.

Meanwhile, consumer applications remain the main driver of Power GaN market growth. Recent trends include charger power capacity increases to 300W, as well as greater efficiency and compactness in home appliance power supplies and motor drives. In addition to the consumer sector, we expect two additional growth catalysts for Power GaN: automotive and data center applications, which are expected to boost the device market size to more than $2 billion by 2029.

02 RF GaN, there is still opportunity

RF GaN is steadily outperforming LDMOS despite weak demand in the 5G telecom infrastructure space in 2023 and 2024, offset by continued growth in the defense and satellite communications markets. We expect a recovery in the RF GaN market, which is expected to slowly regain momentum in 2025 and exceed $2 billion by 2029, driven by telecom infrastructure, defense, and satellite communications applications. MACOM's recent acquisitions of OMMIC and Wolfspeed's RF business not only strengthen its market presence, but also change the RF GaN industry landscape, positioning Wolfspeed as a pure SiC wafer and GaN-on-SiC epiwafer supplier and influencing the open epiwafer market.

For years, radio frequency (RF) GaN has been used in 4G base stations for its performance in the power amplifier stage. Meanwhile, defense applications continue to expand demand for RF GaN-on-SiC in military radar and electronic warfare systems. The decline in RF GaN in 2021 due to the US Huawei ban, the impact of the COVID-19 pandemic, and the slowdown in base station deployments was reversed in 2022. Manufacturers responded to the resurgence of 5G deployments by accelerating the adoption of GaN in their systems.

The recent introduction of GaN on Si into telecom infrastructure will directly impact the industry starting in 2023 and could lead to new market opportunities. In this monitor, we track SEDI, Wolfspeed's RF business (now MACOM), Qorvo, and NXP at the device level, and Wolfspeed, IQE Coherent, and SICC at the wafer and epiwafer level. As the RF GaN market softens and changes, how can the industry reinvent itself and grow?

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