The Japanese giant halts SiC chip plans amid price wars in China and uncertainties surrounding Wolfspeed.
According to a report by Nikkei News cited by TrendForce, Renesas Electronics is abandoning its plans to produce SiC chips for electric vehicles. This move by the Japanese semiconductor company is evidently due to the slow growth of the electric vehicle market, coupled with an oversupply of SiC chips driven by Chinese manufacturers. Previously, it was reported that Renesas’s SiC partner, Wolfspeed, was preparing to file for Chapter 11 bankruptcy protection within weeks.
In July 2023, Renesas announced its entry into the power SiC market through a ten-year partnership with Wolfspeed. The deal included a $2 billion deposit from Renesas to secure the supply of 150mm and 200mm SiC wafers. Renesas initially planned to start production of SiC power chips for electric vehicles at its Takasaki plant in Gunma Prefecture in early 2025. However, according to Nikkei News, the company subsequently disbanded the SiC team at that plant.
TrendForce’s latest research indicates that demand in the automotive and industrial sectors will weaken in 2024, leading to slow growth in the shipment of SiC substrates. Meanwhile, intensified competition and sharp price declines have resulted in a year-on-year decrease of 9% in global revenue for N-type SiC substrates, amounting to $1.04 billion.
Chinese suppliers, TaiKang TianRun and Shandong TianYue, have emerged as significant players, capturing 17.3% and 17.1% of the global market share, respectively. Price competition with Chinese rivals is expected to intensify in the medium to long term, making it more challenging for latecomers like Renesas to profit from silicon carbide chip production. TrendForce added that while Renesas has reportedly decided to cease its in-house production of SiC power chips, the company does not intend to exit the market entirely. Instead, it may continue to develop its own SiC designs while outsourcing manufacturing to foundries and selling finished products under its own brand. Companies that were previously competitors with Renesas, such as Wolfspeed and STMicroelectronics, will face different competitive pressures and market opportunities.
Renesas’s decision may have a certain impact on market confidence, especially in the current environment of intense competition in the SiC market and fluctuating market demand. This could prompt other companies to reassess the prospects of the SiC market, thereby affecting the investment and development pace across the entire industry.A book by American economic historian Chris Miller provides an in-depth analysis of the global chip industry competition and geopolitical struggles. The book compares chips to a scarce resource in the modern world, akin to oil, pointing out that military, economic, and geopolitical powers are all built on chips. From guided missiles to microwaves, from smartphones to stock markets, chips are ubiquitous. The book details the decades-long struggle among nations to control chip technology, explaining the critical role semiconductors play in modern life and how the United States has dominated chip design and manufacturing, applying this technology to military systems.