SiC Demand Growing Faster Than Supply

The silicon carbide (SiC) industry is in the midst of a major expansion campaign, but suppliers are struggling to meet potential demand for SiC power devices and wafers in the market.

In just one example of the expansion efforts, Cree plans to invest up to $1 billion to increase its SiC fab and wafer capacities. As part of the plan, Cree is developing the world’s first 200mm (8-inch) SiC fab, but 150mm (6-inch) will remain the mainstream SiC wafer size for some time. Others are also expanding their 150mm SiC capacities.

That might not be enough, however. Based on various forecasts, there still may be a supply constraint for SiC with high product prices. SiC is a compound semiconductor material based on silicon and carbon. In the production flow, a specialized SiC wafer is developed and processed in a fab, resulting in a SiC-based power semiconductor. SiC-based power semis and rival technologies are specialized transistors that switch currents at high voltages.

SiC stands out for several reasons. Compared to conventional silicon-based power semi devices, SiC has 10 times the breakdown field strength and 3 times the thermal conductivity, making it ideal for high-voltage applications, such as power supplies and solar inverters. The big growth opportunity for SiC is battery-electric cars.

“We are seeing a huge demand for silicon carbide,” said Guy Moxey, senior director of power products at Wolfspeed. “I am not only optimistic about electric vehicles and the charging infrastructure, but then if you look further upstream into the generation of electricity, clean electricity and the distribution of clean electricity, this is a world of opportunity for silicon carbide.”

Today, though, there is a slight pause in demand for SiC devices amid a slowdown in the China market. Even with the lull, the SiC industry has just enough fab and wafer capacity to meet current demand. But at some point, demand is expected to surge again, which is a worrisome sign for many.

“Not only will the number of SiC devices used per vehicle increase, but the number of plug-in electric vehicles is forecast to see a huge increase between 2019 to 2028, due to governments’ need to reduce air pollution and lower the dependency on fossil fuel,” said Richard Eden, an analyst with IHS Markit. “However, several suppliers of SiC devices feel that the supply chain infrastructure is not in place to handle the anticipated aggressive forecast ramp up. Above all, more suppliers of good quality blank 150mm SiC wafers are required to keep up with growing demand and for the resulting competition to drive down costs.”

The recent expansion announcements from Cree and others may alleviate some of the potential supply constraints. But the industry needs to keep tabs on the supply chain. Among the key areas are:

• 150mm fab capacity. Cree, Infineon, Rohm and others are expanding their capacities.
• 150mm SiC wafer supply. Companies are scrambling to obtain supply, even if it means buying from a competitor.
• 200mm SiC fabs. Cree and Rohm plan to develop 200mm SiC fabs, while others are exploring it.
• Fab equipment. Vendors are developing new tools for SiC production.

What is SiC?
The SiC power device business reached $302 million in 2017, up 22% from 2016, according to Yole. According to IHS, the SiC MOSFET market is expected to grow 31% between 2018 to 2028, reaching $1.25 billion by 2028. The SiC power module business will grow 49% during the same period, reaching $1.8 billion by 2028, according to IHS.

Suppliers of SiC devices include Fuji, Infineon, Littlefuse, Microchip, Mitsubishi, On Semiconductor, STMicroelectronics, Rohm, Toshiba and Cree’s Wolfspeed unit.

SiC power semis are one of many types of power devices in the market. Power semis are specialized transistors, which operate as a switch. They allow the power to flow in the “on” state and stop it in the “off” state. These devices boost the efficiencies and minimize the energy losses in systems.

Based on silicon, power MOSFETs and insulated-gate bipolar transistors (IGBTs) are the dominant power semi devices in the market. Power MOSFETs are used in applications up to 900 volts. The leading midrange power semiconductor device is the IGBT, which is used for 400-volt to 10-kilovolt applications.

Both power MOSFETs and IGBTs are reaching their theoretical limits and suffer from energy losses, prompting the need for some new technologies, namely gallium-nitride (GaN) and SiC power semis. Both GaN and SiC are wide bandgap technologies, which  means they provide faster switching speeds and higher breakdown voltages than IGBTs and power MOSFETs.

Fig. 1: What are power switches and how are they categorized? Source: Infineon

The drawback for both GaN and SiC is cost. “We are starting to see silicon carbide come in more for automotive,” said Jim Hines, an analyst with TechInsights. “The thing that’s always held that technology back, not just in automotive applications, is the cost relative to silicon. So as long as IGBTs and other devices like that can be made more cost effective, it’s going to be a headwind.”

Typically, device makers sell SiC power MOSFETs and SiC diodes, which are used in 600-volt to 10-kilovolt applications. A SiC power MOSFET is a power switching transistor. A diode is a device that passes electricity in one direction and blocks it in the opposite direction.

Starting in 2005, the industry began to ramp up SiC power devices in 100mm (4-inch) fabs. Then, from 2016 to 2017, SiC device makers completed the migration from 100mm to 150mm fabs. Today, 150mm is the mainstream wafer size in SiC.

150mm fabs address the cost issue. When moving to a new wafer size, you get 2.2X more die per wafer. A larger wafer size reduces the overall production costs.

This transition hasn’t been easy.

“Everyone was quite happy on 4-inch. But now, the demand has shot through the roof. Everyone is trying to make as much as you can on 6-inch,” said Llewellyn Vaughan-Edmunds, director of strategic marketing at Applied Materials. “You can’t just transfer your process from 4- to 6-inch. There are all sorts of issues. It’s hard to stay within those process windows when you do a transfer of technology on a different wafer size.”

Today, some but not all SiC vendors are still struggling with their 150mm yields. When dealing with SiC materials, dislocations and crystal lattice defects tend to crop up in wafers and devices.

“Most SiC semiconductor manufacturers have already moved from 4-inch to 6-inch wafers, so that is not the problem in itself,” IHS’ Eden said. “However, it is understood that several manufacturers suffered from declining production yield when they made that change, and optimizing production and yield at the larger diameter caused some headaches. There is more of a problem among the wafer suppliers to produce 6-inch wafers to the same quality as they achieved at 4-inch diameters.”

Despite the challenges, the SiC device market began to heat up in 2015 or so amid demand for electric vehicles, power supplies and solar inverters. Then, the market got a boost in 2017, when Tesla began using STMicroelectronics’ SiC power devices for the traction inverter within its battery-electric Model 3 car. The traction inverter provides traction to the motor to propel a vehicle.

Other electric vehicle makers use cheaper IGBTs for the traction inverter, but Tesla proved that SiC is a viable solution. SiC power semis are also being used in other parts of electric vehicles, such as the on-board charger.

”The major driver for silicon carbide power devices is recognition that compound semis present a compelling value proposition for battery-electric vehicles,” said Jed Dorsheimer, an analyst at Canaccord Genuity. “The high cost of a battery is driving a need to improve efficiency, reduce weight and reduce footprint. SiC hits these needs well.”

Nonetheless, from 2015 to 2018, SiC and other power semis were in a strong growth cycle, causing shortages in the market. Then, in late 2018, the market cooled off in China and elsewhere. Today, SiC supply and demand is in balance.

But this could change in the near future, especially for the battery-electric car market. “To date, the number of OEMs with any (SiC) material volume has been limited. You have Tesla in the U.S., NIO in China, and a handful of traditional OEMs with a quasi-BEV strategy like GM,” Dorsheimer said. “But you are starting to see an increased number of companies moving this way in the design win category or qualification. So if everybody launches the cars that they plan to announce, it seems like silicon carbide is going to be in a significant shortage for a while based on our perspective on the market.”

This isn’t a short-lived event. “Looking at a three- to five-year time horizon from supply/demand, it still seems to us that we are going to be in an under-supplied environment. This will lead to a capacity expansion in this marketplace,” Dorsheimer added.

SiC fabs, equipment
Demand is already picking up. For example, thanks to Tesla and others, STMicroelectronics expects that its SiC revenues will double and reach $200 million in 2019.

To meet demand, SiC vendors are increasing their fab and/or wafer capacities. For example, as part of its $1 billion investment plan, Cree will expand its SiC fab capacity up to 30X by 2024. It also will increase its SiC materials production by 30x.

“We continue to see great interest from the automotive and communications infrastructure sectors to leverage the benefits of silicon carbide to drive innovation. However, the demand for silicon carbide has long surpassed the available supply,” said Gregg Lowe, chief executive of Cree. “We believe this will allow us to meet the expected growth in Wolfspeed silicon carbide material and device demand over the next five years and beyond.”

For some time, Cree has been expanding its 150mm fab capacity. In addition, Cree is moving forward with the next SiC wafer size—200mm. At the earliest, 200mm SiC fabs won’t move into production until 2022, according to IHS.

Cree is expanding at two North Carolina-based sites—-the North Fab and Durham. “The North Fab will be a fully automotive-certified 200mm line, and we anticipate ramping this fab in mid-2021, utilizing 150mm wafers. We will then convert production to 200mm wafers in subsequent years in line with demand,” said Cengiz Balkas, senior vice president and general manager of Wolfspeed. “Cree will invest $450 million to build out an empty existing facility on Cree’s Durham campus and create an automotive qualified 200mm capable wafer fab. Cree is also allocating another $450 million dollars to create a materials mega factory also at its Durham site, while converting a smaller existing wafer fab to a second silicon carbide crystal growth facility.”

Meanwhile, Rohm last year announced a 150mm fab expansion plan within a new building. In total, Rohm will increase its SiC production capacity by 16X at a total investment of 60 billion yen (US$546.1 million) by 2025.

Rohm is also looking at 200mm. “Rohm also expects 8-inch wafer production in the near future. So we have already decided that 8-inch equipment shall be installed in the new building. Therefore, we can use this production line for either 6- or 8-inch based on the technology and market situation,” said Kazuhide Ino, group general manager at Rohm.

Another vendor, Infineon, produces SiC devices in a 150mm line. “We do see growing interest in SiC-based power devices, with growth well above the expected general market level,” said Peter Friedrichs, senior director at Infineon. “150mm is sufficient in the short- and medium-term. In the long-term, however, 200mm will be needed to advance the technology and keep the costs down.”

Infineon’s SiC line resides within its 300mm fab, which produces silicon-based power semiconductors. “Because we integrate our SiC production into our high-volume silicon line, we can benefit from a high-volume flexibility. Therefore, production expansion can be managed based on actual demand without requiring significant investments,” Friedrichs said.

Nonetheless, the sudden surge for SiC recently caught the supply chain by surprise, namely the equipment industry. For years, the equipment industry has serviced SiC vendors, mainly with older or refurbished fab tools.

That’s beginning to change. “Everyone is racing now to try and make better and higher quality equipment for epitaxy, etch, gate oxide CVD and other types of stuff,” Applied’s Vaughan-Edmunds said.

For SiC, equipment vendors are developing tools for both 150mm and 200mm. Generally, a 150mm tool can be retrofitted to support 200mm.

While 200mm SiC fabs won’t move into production for some time, the equipment industry needs to get ready for them. “The challenge today is the next transition to 200mm SiC device fabrication,” said David Haynes, senior director of strategic marketing at Lam Research. “Moving to 200mm production has the potential to drive down the unit die price, improving the economics of SiC solutions compared with IGBT technologies, and at the same time, open up access to more advanced process tools with increased process capability and compatibility with silicon fabs.”

The shift to 200mm presents some challenges for SiC. “Current 150mm SiC substrates still suffer from excursions of yield-impacting defects and high densities of crystal dislocation defects,” said Mukund Raghunathan, product marketing manager at KLA. “Developing high-quality production-grade 200mm substrates will be an industry challenge.”

SiC isn’t a simple material to deal with in the fab. “Its transparency and high refractive index make it a very challenging material to inspect for surface defects that may potentially impact epitaxy growth or final device yield. The most common defect types on SiC substrates include micropipes, scratches, pits, surface particles, stains and crystalline stacking faults,” Raghunathan said. “Micropipes are a type of screw (helical) dislocation that impacts device performance. While many SiC substrate manufacturers have optimized their growth process to reduce micropipe density, there are few that still struggle with it, especially on the larger diameter 150mm wafers.”

Fortunately, equipment makers have developed inspection and metrology tools to handle SiC. Meanwhile, once the SiC wafers are made, the substrates are moved to the fab where they are processed into devices.

“Irrespective of whether devices are fabricated at 150mm or 200mm, processing of strongly bonded materials such as SiC poses some challenges compared with silicon,” Lam’s Haynes said. “Particularly, etching SiC with precise profile control, surface quality and high throughput is a key capability needed to enable the transition from planar SiC MOSFET to SiC trench MOSFET architectures.”

Then, after the devices are processed on a wafer in the fab, they are diced and packaged. The dicing process presents some challenges. “Silicon carbide is the third hardest compound material on earth with material hardness of 9.5 on the Mohs scale,” said Meng Lee, director of product marketing at Veeco. “The wafers are extremely difficult to cut because they are almost as hard as the diamond wheel they are cut with. These wafers are also brittle and chip easily during the cutting process, causing the blade to wear out quickly.”

Finally, SiC devices require some form of packaging or modules. “From a packaging perspective, there does not appear to be any major obstacles that would preclude it from going into automotive,” said Rich Rice, senior vice president of business development at ASE.

But the general field of IC-packaging for power semis brings some new issues into the mix. “Clearly, automotive power packaging is now advancing at a more rapid pace given rising demand and application evolution. The electrification of vehicles (HEV, EV) is bringing new power applications into play with more voltages to convert and motors to drive,” Rice said. “As such, we expect more integrated and efficient power modules using elaborate leadframe with clip structures, as well as embedded die in PCB technologies that allow smaller sizes and more efficient power delivery performance. The requirement for advanced materials like Ag (silver) sintering for die attach is key for better performance, while higher temperature materials like mold compounds for higher reliability performance is essential. System-in-package will also play a role as over-molded modules are inherently more reliable than PCBA assemblies.”

SiC wafers
To be sure, SiC wafers are also critical. “For SiC to gain market share versus silicon, SiC semiconductor devices need to have lower prices. SiC device ASPs are fundamentally dependent on SiC wafer costs, and these have not fallen fast enough in the last three years,” IHS’ Eden said.

There are two types of SiC wafer suppliers—vertically integrated and third party. Wolfspeed, ST and Rohm are vertically integrated. Wolfspeed not only supplies SiC wafers for its own power semis, but it also sells them to others. Infineon and STMicroelectronics have recently signed wafer supply agreements with Wolfspeed/Cree.

Rohm sells power devices and also has an internal SiC wafer manufacturing unit. Then, to obtain more supply, STMicroelectronics recently bought a majority share in Norstel, a supplier of SiC wafers. Then, II-VI, Dow, Showa Denko, Sumitomo and others are among the third-party SiC wafer suppliers.

Still, the question is clear—is there enough SiC wafer supply to meet potential demand? “In short, Cree’s recent announcement will help the SiC power supply chain to realize its potential,” Eden said. “Most SiC wafer suppliers are also expanding their production capacity as quickly as they can.”

So the SiC supply chain is gearing up for what could be a wave of demand in the electric car and other industries. Still to be seen, however, is whether the electric car market will take off in a big way. If it does, SiC and other power devices are in for a wild ride.

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