The battle for SiC – the market landscape continues to change

Over the past several years, the market has witnessed a considerable increase in M&A transactions. Between 2006 to 2017, there was only one transaction every two years, but since 2018, there have been six transactions yearly, exceeding historical records, as pointed out by TrendForce.

Out of 31 SiC and GaN M&A transactions since 2006, 21 of the deals have a direct SiC connection. This is mainly due to after its development over 20 years, SiC has been able to be mass-produced for market demands, especially in the automotive sector where SiC has established itself as a mainstream technology.

As seen by the frequency of M&A, US and European industry heavyweights including Wolfspeed, Onsemi, II-VI, STMicro, and Infineon have started accelerating vertical integration in recent years.

Looking at the US, 12 M&A transactions have occurred, with only four of them taking place before 2018, and Wolfspeed was involved in three of them. To address market demands, Onsemi, II-VI, and Macom have led various deals over the last three years with an emphasis on SiC's vertical integration.

Since 2006 there have been eight M&A transactions in Europe in total, all of which occurred in 2018 and later, with ST and Infineon serving as the key participants. To keep their competitive edge in the SiC power device sector, both businesses have been strategically acquiring technological expertise.

As pointed out by TrendForce and illustrated by the data is that major businesses in the sector are primarily responsible for the high frequency of M&As in the US and Europe, which are steadily reshaping the market's landscape.

Attention should also be directed to M&A deals amongst semiconductor equipment businesses. Recent acquisitions of LPE and Epiluvac by ASM and Veeco show that equipment makers have also recognised the enormous potential of the SiC sector and are stepping up their investment.

According to the most recent data from TrendForce, the overall market for SiC power devices is expected to increase at a rate of 41.4% per year to reach USD 2.28 billion by 2023 and USD 5.33 billion by 2026, with a 35% annual growth rate.

But the present market boom also brings a new problem: a lack of supply. Despite attempts by corporations to increase production, one of the main barriers to industry expansion is the lack of SiC substrate material.