Interview Synopsis

China’s third-generation semiconductor materials 2020-25 outlook

  • Multi Asset
  • Materials
  • Greater China

Semiconductors are essential components of electronic devices. The global semiconductor market is expected to grow from around USD 500bn in 2020 to approximately USD 572bn by 2022, with data processing and communications representing the bulk of the market, according to Statistica. Third Bridge Forum interviewed a former manager at TankeBlue Semiconductor Co Ltd to discuss the five-year outlook for China’s third-generation semiconductor materials.

Powering up for growth of China’s third-generation semiconductor materials

The first question posed to the specialist was how third-generation semiconductor materials are gaining traction in the country. Silicon carbide (SiC) — the second hardest material in the world (after diamond) — and gallium nitride (GaN) are two major types, with use of the former “rising rapidly”. 

“The growth of China’s SiC market will be driven principally by the deployment of 5G networks, which employ microwave RF [radio frequency] technologies, and the popularity of new energy vehicles, which incorporate power electronics technologies,” he said. Although only about 5% of China’s new energy vehicles currently use SiC devices, “the room for growth is huge”: penetration could reach over 90% within the next five years. The penetration of SiC devices for microwave RF purposes is “already quite high”. They are used across nearly half of all 5G base stations, but expected to reach 95% or even 100% within five years.

Overall, SiC uptake is currently low because production methods result in low yields and therefore high prices — the raw material represents up to 60% of the total costs of SiC devices and a SiC wafer can be 100 times more expensive than a silicon wafer of the same size. Future price reduction therefore depends on technological advancements. The Interview mentioned two “promising methods” that are not widely used at present but in relation to which the specialist anticipates a “breakthrough” in five years. 

Meanwhile, GaN is three to five years behind SiC in terms of commercialisation, according to the expert. Other areas explored in the Interview included the barriers to equipment R&D for SiC substrate, the profitability of domestic SiC substrate manufacturers, and an evaluation of the leading domestic third-generation semiconductor companies in China.

To access all the human insights in Third Bridge Forum’s China’s Third-generation semiconductor materials 2020-25 outlook, click here to view the full transcript. 

The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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