Japanese companies are scrambling to secure a stable supply of silicon carbide (SiC) wafers, which are essential for manufacturing next-generation power semiconductor devices. DENSO and Mitsubishi Electric will each invest 500 million US dollars (approximately 74.5 billion yen) in a new SiC wafer company. Toyota Motor Corporation has decided to provide technical cooperation to a startup company that has technology to improve the quality of SiC wafers. Renesas Electronics has paid a deposit of US$2 billion (approximately 298 billion yen) and signed a long-term supply contract with the largest SiC wafer manufacturer. Japanese companies, mainly in the automobile industry, have begun to take major steps to secure high-quality SiC wafers.
Japanese companies are actively procuring SiC wafers because demand for SiC power devices is expected to rapidly expand in the future. According to research by Fuji Keizai (Chuo, Tokyo), the SiC market is expected to rapidly grow from 170.7 billion yen in 2022 to 2.208 trillion yen in 2030. Although it accounted for less than 10% of the total power semiconductor market in 2022, it is predicted to account for nearly 30% in 2030. Along with this, the SiC wafer market will also grow rapidly. According to Fuji Keizai, the market is expected to grow from US$358.4 million (approximately 53.5 billion yen) in 2022 to US$2,214.4 million (approximately 331 billion yen) in 2030.
The driving force is the automobile. A significant increase in demand for electric vehicles (EVs) is expected. These include an on-board charger, a DC-DC converter, and an inverter that drives the main motor. SiC also plays an active role in rapid chargers installed on the ground.
SiC is attracting attention because it can significantly reduce power loss compared to general silicon (Si). Reducing power loss will lead to longer cruising range. If the cruising distance remains the same, battery costs can be reduced because the battery capacity can be reduced due to less power loss. Because of these advantages, they are gradually being introduced starting with high-end EVs. This trend is expected to accelerate in the future, and SiC is expected to be adopted in many EVs around 2025.
As demand for SiC power devices rapidly increases in the future, wafer procurement will determine the success or failure of the business. Therefore, power semiconductor companies have begun securing SiC wafers. Until now, the focus has been on overseas companies that have invested heavily in manufacturing bases for these devices. Recently, Japanese companies, mainly in the automobile industry, are investing large sums of money to participate in the battle for SiC wafers.
Renesas started the fire
Renesas Electronics is the company that kicked off this trend in 2023. In July, the company concluded a 10-year long-term supply contract for SiC wafers with Wolfspeed, the largest SiC wafer company in the US. Renesas will pay a deposit of US$2 billion (approximately 290 billion yen).
This deposit is a very high amount for the power semiconductor industry, especially for Japanese power semiconductor companies, where investment amounts range from billions of yen to tens of billions of yen. The reason Renesas goes so far in seeking SiC wafers is that Renesas is a "newcomer" in the SiC industry.
Renesas has been working on Si power devices so far, and will begin mass production of SiC power devices in 2025. For Renesas, which has no track record in purchasing SiC wafers, the payment of the deposit appears to have been necessary to demonstrate its "seriousness" toward the SiC business. Through this contract, Renesas will procure SiC wafers with a diameter of 150 mm (6 inches), which is currently mainstream, and SiC wafers with a diameter of 200 mm (8 inches), which will begin full-scale mass production in the future.
DENSO and Mitsubishi Electric enter the fray
In October 2023, even more Japanese companies moved to procure SiC wafers. Mitsubishi Electric and DENSO each announced that they will invest 500 million US dollars (approximately 74.5 billion yen) in US SiC wafer company Silicon Carbide. As a result, DENSO and Mitsubishi Electric will each hold 12.5% of Silicon Carbide's shares.
Taking advantage of this investment, DENSO and Mitsubishi Electric entered into long-term supply contracts for silicon carbide and SiC wafers, respectively. Both companies will be able to stably procure 6-inch and 8-inch products.
Silicon Carbide is a new company established in April 2023 by the US company Coherent, which spun off its SiC wafer business. Coherent has been manufacturing SiC wafers since its predecessor II-VI. Among these, it has a strong track record with "semi-insulating" SiC wafers used in high-frequency devices. It also handles products for power devices, and is in a position to follow Wolfspeed, the largest company in the field of power devices.
DENSO is a major automotive semiconductor company that manufactures SiC power devices and inverters that use these devices. Mitsubishi Electric produces module products (power modules) equipped with SiC power devices for a variety of markets, including not only automotive applications but also renewable energy and industrial equipment.
Each company is focusing on mass production of SiC power devices. For example, Mitsubishi Electric will invest approximately 100 billion yen to build a new SiC power device factory in Kumamoto Prefecture. It is scheduled to be operational in 2026. In conjunction with the expansion of existing facilities, the company plans to increase its production capacity for SiC power devices by approximately five times in fiscal 2026 compared to fiscal 2022. Originally, Mitsubishi Electric was working on joint development of 8-inch wafers with Coherent for this new factory.
Toyota focuses on startups
Toyota Motor Corporation has also moved. In order to secure a stable supply system for high-quality SiC wafers, it has entered into a technology development outsourcing agreement with QureDA Research (Sanda City, Hyogo Prefecture), a startup that has technology to improve the quality and productivity of SiC wafers. It will mainly support with mass production technology.
QureDA Research is a research and development company established in March 2023 as a 50-50 joint venture between Kwansei Gakuin (the educational corporation that operates Kwansei Gakuin University and other schools) and Toyota Tsusho. The core of the project is the “Dynamic AGE-ing (DA)'' technology, which is based on the results of the research group of Tadaaki Kaneko, CEO of QureDA Research and professor of engineering at Kwansei Gakuin University. Crystal defects and distortion that occur when cutting wafers from SiC crystals are significantly reduced through heat treatment and other methods. This will lead to improvements in the quality and yield of SiC power devices.
Taking advantage of this agreement, Toyota will outsource some of the work related to developing mass production equipment and establishing a quality assurance system to commercialize DA technology. Toyota will provide QureDA Research with the technical know-how it has cultivated through automobile manufacturing. For example, the concept of process planning, equipment development, and quality assurance related to product heat treatment. It is said that heat treatment technology for materials (parts that are shaped by applying heat and force to materials) is compatible with DA technology, where heat management is important. In addition, the company will provide QureDA Research with know-how regarding standardized rules to maintain mass production quality.
QureDA Research also handles crystal evaluation technology necessary to improve the crystal quality of SiC. We will license DA technology and this evaluation technology to external parties. The company is working toward the goal of releasing an 8-inch SiC wafer product using DA technology in 2025.
SiC: A compound of carbon (C) and silicon (Si), called silicon carbide. There are polycrystals and single crystals, and single crystals are used as power semiconductors. It is considered one of the next-generation power semiconductors because it has superior material properties as a power semiconductor compared to Si.
When SiC power semiconductor devices (power devices) are applied to power converters such as converters and inverters, power loss can be significantly reduced compared to Si. It can operate at temperatures of over 200 degrees Celsius, which is difficult to do with Si power devices. It is suitable for downsizing power converters due to its characteristics of low power loss and high-temperature operation.
Although SiC has excellent characteristics, it is expensive. In particular, the cost of SiC wafers required for manufacturing power devices is higher than that of Si wafers, and their diameter is smaller. However, these issues are being resolved, and recruitment is increasing year by year. It is expected that SiC will be used in electric vehicles from 2025. In addition, SiC power devices will be increasingly adopted in applications that require high output and high voltage resistance, such as energy infrastructure, renewable energy, railways, and industrial equipment.