Report: Japan gearing up for SiC mega deal

26 September 2023
A SiC wafer in production at a STMicroelectronics facility. The SiC market is expanding rapidly and many companies are looking to secure supply for the future. Source: STMicroelectronics.

U.S. materials supplier Coherent Corp. has garnered the attention of four Japanese conglomerates for a major silicon carbide (SiC) investment of as much as $5 billion.

According to a report from Reuters, Denso Corp., Hitachi Ltd., Mitsubishi Electric Corp. and Sumitomo Electric Industries Inc have talked to Coherent about taking a minority stake of its SiC business.

Coherent has plans to invest about $1 billion over the next 10 years to expand its production of SiC wafers. This financial burden may be alleviated with the company accepting one of these companies as an investor for a value of between $4 billion and $5 billion, the report said.

Why SiC?

SiC semiconductors have been in development and production for decades but only recently have the chips become a hot commodity. This is due to the benefits these semiconductors have in the development and operation of electric vehicles (EVs) and renewable energy sources.

With governments globally looking to cut their carbon footprint due to regulations, combined with consumer interest, adoptions of EVs is sending the SiC market to new heights.

Not surprisingly, automotive OEMs are planning to switch to battery electrified models as the primary cars sold in the next 10 to 15 years. This has put a huge demand for SiC chips in the automotive power sector that has traditionally been dominated by silicon IGBT and MOSFETs. But the rise in EVs and solar and other renewables is giving wide bandgap technologies like SiC new opportunities.

Securing supply

Many automotive OEMs and those developing internal parts for EVs and renewables are seeking to firm up relationships and deals so they have a secure supply of SiC chips for many years to come.

As a result, the automotive power market — power MOSFETs, IGBT and SiC semiconductors — is set to reach revenues of $26.6 billion by 2030, according to market research firm TechInsights. This is nearly double the revenue it will generate this year at $12.6 billion. In the next five-year period, the power chip market for automotive is forecast to manage a compound annual growth rate (CAGR) of 16.0%.

Some of the exclusive deals made in the past year include:

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