On Semiconductor Corp. (Onsemi) may invest an additional $2 billion to boost the production of silicon carbide (SiC) semiconductors that are used in power systems, specifically in electric vehicles (EVs).
In an analyst presentation, Onsemi said the expansion may come either in the U.S., the Czech Republic or South Korea, areas where the company already has semiconductor fabs.
Onsemi produces ICs for the automotive industry, which are used in EV drive trains as well as other automotive systems such as cameras and sensors used in advanced driver assistance systems (ADAS). Additionally, these SiC power devices are used in EV charging.
In fact, earlier this week Onsemi signed a deal with Kempower to supply the company with SiC power semiconductors for use in scalable EV chargers.
The demand for SiC chips is rising rapidly in response to the transition in the automotive industry to electrification. Over the next 10 to 15 years, automotive OEMs have pledged to convert most of their fleets to electrified models due to the goal to fight climate change and answer to consumer demand that is rising for EVs.
Not surprisingly, the market for SiC power devices is forecast to grow to $2.28 billion this year — a 41.4% year-over-year growth — and is forecast to reach $5.33 billion by 2026, according to TrendForce.
The market research firm said the highest growth markets for SiC devices are in EVs and renewable energy sectors.
Because of the recent automotive semiconductor shortage and to shore up a direct supply of SiC semiconductors, the sector has seen numerous semiconductor agreements with automotive OEMs. These include Onsemi directly supplying Volkswagen with SiC chips and Kia adopting its EliteSiC 1,200-volt power modules from Onsemi.
TrendForce forecasts SiC power devices used in EVs to rise to $3.98 billion by 2026 with a compound annual growth rate (CAGR) of 38%. SiC power devices used in renewable energy systems will have a CAGR of 19% and reach $410 million.
Onsemi isn’t the only company expanding its SiC production.
Earlier this week, X-Fab said it would expand its Lubbock, Texas, semiconductor facility by $200 million to keep pace with demand for SiC semiconductors.
Bosch acquired U.S. semiconductor foundry TSI Semiconductors to expand its own SiC portfolio and Wolfspeed plans to build its first semiconductor fab in Europe — a 200 mm wafer factory that will manufacture SiC devices. The European fab is part of a larger $6.5 billion capacity expansion effort for SiC operations by Wolfspeed.
Other companies like Texas Instruments and Skyworks are also accelerating plans to develop SiC semiconductors primarily for the automotive market but will play in other hot markets.