Europe-China silicon carbide JV shuns US tech war
STMicroelectronics joining tech forces with Sanan Optoelectronics in $3.2 billion venture to produce SiC power devices used in EVs
Europe’s STMicroelectronics and China’s Sanan Optoelectronics will form a joint venture (JV) in Chongqing, a tech collaboration that promises to boost China’s electric vehicle (EV) industry while also underscoring the limits of US efforts to disrupt China’s semiconductor production.
On June 7, STMicroelectronics said that the JV will produce silicon carbide, or SiC, power devices using its proprietary manufacturing process on 200mm SiC substrates to be made in a separate dedicated facility to be built, owned and operated by Sanan Optoelectronics.
The two companies plan to start production in the fourth quarter of 2025 and reach maximum targeted capacity by 2028. In addition to automotive products, the JV will make power semiconductor devices for other industrial and energy applications such as solar and wind.
The JV’s total investment is expected to reach US$3.2 billion, including $2.4 billion in capital spending over the next five years. Contributions from the two companies will be augmented by loans and government support.
“The combination of Sanan Optoelectronics’ future 200mm substrate manufacturing facility with the front-end [wafer processing] JV and ST’s existing back-end [assembly and test] facility in Shenzhen, China, will enable ST to offer our Chinese customers a fully vertically integrated SiC value chain,” said STMicroelectronics CEO Jean-Marc Chery,
It will also provide China with a complete domestic supply chain for SiC power devices that are now critical for EV production.
Sanan Optoelectronics CEO Simon Lin added that “The establishment of this joint venture will be a major driving force for the wide adoption of SiC devices on the Chinese market… [It is also] an important step for Sanan Optoelectronics’ ambitions as a SiC foundry.”
STMicroelectronics is a French-Italian semiconductor producer headquartered in Geneva, Switzerland. Its product lines include analog, industrial and power conversion integrated circuits (ICs), dedicated automotive ICs, discrete and power transistors, micro-controller units and micro-processor units, micro-electro-mechanical systems, optical sensors and proprietary application-specific ICs.
Sanan Optoelectronics, headquartered in Xiamen, China, is mainly engaged in the research, development, production and sales of light-emitting diode (LED) products and semiconductors.
Its semiconductor products include radio frequency (RF) chips for mobile phones and devices and mobile phone base stations, according to a Reuters company profile. The company is also involved in LED substrates, devices and lighting products; photodiodes; lasers for LiDAR and other applications; solar cells and power semiconductor wafers and devices.
Power semiconductors control the electricity used to run motors, power systems, lighting and other appliances by converting electric power from AC to DC and adjusting voltages to appropriate levels. Most power semiconductors are made of silicon but the use of SiC is increasing rapidly, including in EV motor and charging systems.
SiC devices are comparatively more energy efficient and reliable than silicon-based ones. They are also more expensive and more difficult to make, although prices are coming down as production volumes rise.
SiC’s advantages include resistance to higher voltages, tolerance of a wider range of temperatures and vibration, and longer device lifetimes. More information about power devices, SiC devices and SiC wafers can be found here.
French market research and consulting firm Yole Developpement estimated in 2022 that demand for SiC power devices would grow at a compound annual growth rate (CAGR) of 34% from 2021 to 2027, with automotive applications rising from 63% to 79% of the total.
According to Yole, STMicroelectronics is the world’s third-largest maker of discrete power semiconductors and modules after Infineon and Onsemi, and the largest maker of SiC power semiconductors. Estimates from Yole and other sources indicate that STMicroelectronics has around 50% of the SiC device market worldwide.
STMicroelectronics’ share of the SiC power device market share will most likely decline over time as competitors in Europe, the US, Japan and China ramp up production. This makes the firm’s new JV in China key to reaching its financial targets, CEO Chery says,
“It is an important step to further scale up our global SiC manufacturing operations, coming in addition to our continuing significant investments in Italy and Singapore,” Chery said. He said the JV is expected to help the company reach $5 billion-plus in SiC revenues by 2030.
For Sanan Optoelectronics, the JV is crucial to establish a lead over other Chinese companies working on SiC wafers and devices as part of the nation’s effort to strengthen its EV supply chain and reduce power consumption and carbon emissions.
On May 3, German power semiconductor maker Infineon announced that it had signed a long-term agreement with China’s TanKeBlue, which will supply it with SiC wafers and ingots.
According to Infineon, “The agreement between Infineon and TanKeBlue contributes to general supply chain stability, also with regard to the growing demand for SiC semiconductor products for automotive, solar and EV charging applications and energy storage systems in the Chinese market.”
Japanese SiC wafer and device maker Rohm, meanwhile, has formed partnershipswith BASiC Semiconductor of Shenzhen to supply power modules and Nanjing SemiDrive Technology to develop and produce devices for vehicle cockpit applications.
In 2022, STMicroelectronics was the world’s 11th-largest semiconductor company in terms of revenue (excluding TSMC and other foundries), according to Gartner market research, and the largest in Europe with integrated device factories in Europe, Morocco, Southeast Asia and China.
In March 2023, SemiAnalysis reported that STMicroelectronics is moving quickly to speed up and improve SiC device quality via wafer-level burn-in testing.
In September 2021, industry research and news site SemiAnalysis judged that Sanan Optoelectronic’s claims regarding its SiC wafer manufacturing technology were not credible, but clearly STMicroelectronics views its new Chinese partner’s capacity and potential favorably.
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