Cree, now known as Wolfspeed, is an industry leader when it comes to silicon carbide power devices and Yole anticipates their market to experience exponential growth both within the automotive sector as well as industrial applications.
Wolfspeed now operates two state-of-the-art 200mm wafer fabs: one in Raleigh and one in New York’s Mohawk Valley, to expand production of power semiconductor solutions in markets where there is high demand.
Wafer Fabrication
Wolfspeed stands as an industry leader when it comes to wafer fabrication. Wolfspeed uses silicon carbide (SiC), an advantageous material with favorable chemical and material properties when compared with traditional silicon. By producing silicon carbide devices more efficiently than their silicon counterparts, these silicon carbide devices allow smaller chips with similar power ratings to reach similar power ratings, leading to improved device yields overall.
Wolfspeed SiC chips are used in electric vehicles (EVs), offering higher driving range-per-charge and faster charging times to save on costs and emissions. Their silicon carbide devices are also widely employed by renewable energy systems and industrial capacities – Wolfspeed silicon carbide devices are now becoming part of emerging industrial designs for applications such as e-mobility and vertical takeoff and landing aircraft (EVVTOLs), to reduce system weight, cost, performance and range while offering increased performance capabilities.
Current production for all devices manufactured by this company takes place at its Durham, North Carolina facility; however, due to rapid expansion, two additional factories – Mohawk Valley in New York and John Palmour Manufacturing Center in Siler City North Carolina have recently opened as well.
Mohawk Valley Fabrication Center was opened with a ribbon cutting ceremony attended by state and federal officials on January 8, 2022. As the inaugural facility of its kind, this groundbreaking factory will produce 8-inch silicon carbide devices to support EVs, renewable energy generation technologies, AI data centers and national security applications.
Devices
Wolfspeed’s vertically integrated company model makes them well-positioned to manufacture power SiC devices, as they control every step of production from start to finish. Recently, they unveiled the SpeedVal kit as an evaluation platform designed to assist engineers in designing efficient, reliable and smaller power converters using SiC devices in power topologies of their choice.
This kit provides designers with a power-daughter card to easily swap out discrete SiC devices for performance testing at up to 1,200 V, as well as low-risk gate driver alternatives for quick testing. Furthermore, the system includes a control card to optimize system-level operations.
Yole Group reports that SiC device CapEx is growing at an increasingly faster pace, though still trails substrate and epitaxy wafers in terms of size. Yole predicts this trend will continue until 2026 when industry will reach a peak before beginning to gradually decline again.
As industry moves toward cutting costs and improving efficiency, there has been an increasing demand for higher-voltage SiC power semiconductors. Raising voltage increases power density in circuits while simultaneously decreasing manufacturing costs and electrical losses; additionally it allows thinner wiring, leading to reduced manufacturing costs as well as smaller components, which in turn decrease vehicle weight while expanding range.
SiC is not only known for its superior high-voltage performance, but it also boasts superior physical properties over silicon. Its dielectric strength is 10x higher, making it suitable for higher switching frequencies – meaning components like inductors and transformers can become significantly smaller.
Market Share
Yole Group anticipates significant growth for silicon carbide (SiC) power semiconductors due to the increased adoption of electric vehicles (EVs) and industrial applications such as chargers for these vehicles.
Yole Technologies stands to gain a substantial portion of this expanding market given their leading position in SiC substrates and epiwafers. Yole projects that by 2024 power semiconductor revenues will comprise over 45% of revenues; 33% will come from wafer fabrication services.
Wolfspeed faces some difficulties meeting its near-term goals due to the EV market being such a major contributor. A prolonged downturn could reduce demand, leading to revenue and profit loss and shortfalls.
Additionally, successfully transitioning to 200mm device production at Mohawk Valley Fabrication (MVF) facility and optimizing utilization at Durham will require careful execution. Any technical hurdles or delays could lead to capacity shortfalls that impede our ability to meet customer demand.
Wolfspeed may experience a longer-term rebound; however, investors should keep in mind that its capital spending forecast remains significantly higher than its theoretical revenue. This may make the company vulnerable to prolonged weakness in key markets if its capital expenditure forecast cannot be reduced and operating efficiency improved to align with reduced financial targets.
Strategy
STMicroelectronics, Wolfspeed, onsemi Rohm & ROHM have quickly taken advantage of the rapidly developing silicon carbide (SiC) industry by quickly jumping onto the bandwagon of electric vehicles (EVs). SiC power electronics play an essential part in increasing performance; their lower electrical losses enable thinner wiring and smaller components which helps reduce manufacturing costs while increasing driving range of vehicles.
Wolfspeed, the market leader for SiC substrates and epiwafers in the US is currently facing pressure to improve its financial metrics despite an optimistic market outlook. Rising demand for SiC devices from electric vehicle charging stations as well as safety systems is driving revenue growth for them.
To achieve this goal, the company needs to focus on improving operational and construction execution at its 200mm Mohawk Valley fab and 445-acre Siler City materials facility, setting realistic targets and capital expenditures to prevent additional capital raises that dilute shareholder value.
Additionally, companies should look at acquiring players with significant intellectual property assets in the downstream part of SiC supply chains such as power module packaging and device technologies (such as SiC planar MOSFETs and diodes). Unfortunately, M&A activity in semiconductor industry has been restricted by low valuations making negotiations for favorable deal terms very challenging.
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