1、 Hot demand and rapid increase in market penetration

According to data from Guosen Securities, in January 2025, the proportion of SiC MOSFETs in the main drive modules of new energy passenger vehicles in China has reached 18.9%. Among them, the penetration rate of 800V high-voltage platform models is about 15%, and among these 800V models, the penetration rate of silicon carbide is as high as 71%.

At the same time, the demand for photovoltaic inverters in the market is also rapidly increasing. It is expected that the global photovoltaic inverter market will grow from 135.2 billion US dollars to 730.7 billion US dollars from 2023 to 2033, with an average annual compound growth rate of 18.38%. By 2025, the penetration rate of SiC photovoltaic inverters is expected to reach 50%.

The demand was hot, which should have been the "golden age" for SiC manufacturers, but reality turned out to be contrary to expectations.

2、 SiC prices continue to fall, with upstream materials falling first

The fundamental reason for the continuous decline in SiC prices is that production capacity expansion far exceeds actual demand.

The substrate price has plummeted significantly

Taking the data disclosed by Tianyue Advanced as an example, the average selling prices of its SiC substrates from 2022 to 2024 are as follows:

2022: 5110 yuan/piece

2023: 4798 yuan/piece

2024: 4080 yuan/piece (down nearly 15% year-on-year, the largest decline in history)

According to industry feedback, the price of 6-inch SiC substrates has dropped to about 3000 yuan/piece in 2024, while the price of 8-inch substrates is limited by production capacity and yield, and currently remains at around 10000 yuan.

The price of epitaxial wafers is accelerating downward

According to Tianyu Semiconductor's prospectus, the price changes of 6-inch SiC epitaxial wafers from 2021 to the first half of 2024 are as follows:

2021: 9913 yuan/piece

2022: 9631 yuan/piece

2023: 8890 yuan/piece

First half of 2024: 7693 yuan/piece (a sharp drop of 13%)

Tianyu stated that the significant price reduction of epitaxial wafers in the first half of 2024 is mainly affected by the price reduction of upstream SiC substrates.

3、 Downstream device manufacturers: With more orders, profits have disappeared

The continuous decline in prices has seriously eroded the profit margins of SiC manufacturers. On the one hand, the enterprise's orders have grown rapidly, but on the other hand, it has fallen into an awkward situation of "not making money".

Infineon: In the fiscal year 2024, the SiC business revenue increased by 30% year-on-year, but the overall profit margin decreased from 26.1% in 2023 to 20.8%, and is expected to continue to decline to 14% -19% in 2025.

STMicroelectronics: Revenue from its power and discrete products division decreased by 22.1%, with profit margin dropping from 25.4% in the same period last year to 11.9%.

Ansenmei: Net profit for the fourth quarter of 2024 decreased by 28% year-on-year.

Wolfspeed： Revenue for the same period decreased by 22% year-on-year, and the loss further expanded to $372 million.

From the data, although the overall market size is still expanding, the profitability has not improved with the growth of demand, but has significantly deteriorated.

4、 The vicious cycle of SiC industry: expansion, price reduction, and losses

According to normal industrial logic, it is an inevitable trend for the prices of emerging market products to decline year by year, but the price reduction rate of SiC since 2024 has significantly exceeded market expectations.

The main reasons for this phenomenon include:

Upstream material production capacity has surged, leading to a sharp drop in substrate and epitaxial wafer prices;

Device manufacturers have to passively lower prices in order to seize market share;

Overcapacity and intense market competition have further intensified the price war;

Downstream customers in the fields of new energy vehicles, photovoltaics, etc. are increasingly strict in cost control.

Under this vicious cycle, SiC prices are difficult to stabilize in the short term.

5、 When will SiC prices stop falling?

To see SiC prices stop falling and even show signs of recovery, several conditions may need to be met:

Accelerated industrial clearance: There is a serious overcapacity situation, and only through a large-scale capacity contraction and integration can the market supply and demand relationship be restored to balance.

Breakthrough in yield technology: Improve substrate and epitaxial yield, reduce production costs, and enable enterprises to maintain reasonable profits while lowering prices.

Rapid outbreak of new applications: driving emerging scenarios such as high-power charging piles and energy storage markets to rapidly scale up and expand demand.

But the above conditions are difficult to achieve quickly in the short term. Therefore, from the current industry cycle perspective, the "bottom" of SiC prices may not have arrived yet.

6、 Conclusion: After the price war, who can laugh until the end?

Behind the price reduction trend in the SiC industry is actually a knockout race. Only those enterprises that have absolute advantages in technology, cost, and scale can survive the harsh winter of price wars and usher in the spring of industrial recovery.

It is difficult to predict a price rebound in the short term, but in the long run, this price war may be the necessary path for the industry to mature. The companies that have survived this industry reshuffle will redefine the competitive landscape of the future SiC market.

For industry practitioners, the top priority is not to wait for prices to stop falling, but to continuously optimize products, improve yield, and seize market opportunities with low-cost and high-efficiency products in a market environment where prices continue to decline.