ST Readies For SiC Take-off
Striving for SiC market domination, STMicroelectronics has closed its deal to acquire SiC wafer maker, Norstel. Where next for Europe's biggest-earning chip maker, asks Rebecca Pool.
In an ongoing bid to bolster its SiC supply chain, STMicroelectronics closed its deal to acquire Sweden-based SiC wafer manufacturer, Norstel, in December last year. All in all, the Switzerland-based chip maker paid $137.5 million for Norstel, a move that follows a string of SiC agreements in 2019.
In January 2019, ST signed a $250 million, multi-year deal with Cree to source its 150 mm bare and epitaxial wafers, and one month later revealed it had acquired a majority stake in Norstel. Then come November, it extended its Cree wafer deal to more than $500 million, just before detailing plans to buy the remainder of Norstel.
As Marco Monti, President of STMicroelectronics Automotive and Discrete Group, says: “ST has made clear its ambition to continue to lead in the market for SiC, and this requires full flexibility in our wafer supply chain.”
“The Norstel acquisition and wafer supply agreements keep us on track to secure the SiC wafers we require to meet the demand for SiC MOSFETs and diodes for automotive and industrial customer programmes that will ramp up in the coming years,” he adds.
In addition, investments in a 300 mm power technologies fab in Agate, Italy, hold promise for future SiC capacity increases. And across results briefings, Jean-Marc Chery, president and chief executive of ST has outlined plans to capture at least a 30% slice of a total market that which could top $3 billion by 2025.
As part of these plans, ST will now fully integrate Norstel's Norrköping facility into its operations. With this, ST intends to ramp up production of 150 mm SiC wafers as well as increase research and development activities on 200 mm wafer production.
“We also expect [Norstel's] facility to contribute to our broader efforts on wide bandgap materials,” highlights Monti. “We won't discuss our capacity or how much [capacity] this facility adds, but our overall capacity is fully in line with today's demands and will support our ambitions to continue to lead the SiC market.”
“Activity on 200 mm R&D wafer preparation has already started and we intend to be ready with the technology when the market requires wafer migration,” he adds. “The Norstel acquisition boosts our flexibility, allowing us to better control improvements in yield and wafer quality, as well as support our long-term SiC roadmap and business.”
Without a doubt, automotive markets are a huge draw for any wide bandgap semiconductor player. In the last two to three years, auto-manufacturer investments in electric vehicles have been gathering momentum reaching hundreds of billions of dollars and increasingly driving demand for SiC.
Cree chief executive, Gregg Lowe, has largely attributed his company's massive SiC investments to anticipated demand from vehicle manufacturers. Indeed, alongside Infineon and Osram, Cree recently joined the Volkswagon Group's 'Future Automotive Supply Tracks' Initiative to drive vehicle projects forward.
Meanwhile, ST has won design-in contracts with key automotive players for its microcontrollers in electric vehicle charging adapters and communications systems.
Still as Monti points out: “While automotive markets get much of the attention for SiC MOSFETs and diodes, we also see significant opportunity for SiC, and GaN, in high-end industrial applications, including power supplies, renewable generation and industrial motor drives.”
“We already have many customers in industrial applications... and technology proliferation and improved affordability will make [SiC] a winning technology for high power applications greater than 650V,” he adds.
But what about recent issues with China? Ongoing political tensions aside, a softening in demand for electric vehicles from the nation, following cuts in government subsidies, could weaken demand for SiC in the short term. ST's Automotive and Discrete Group President isn't fazed.
“We have a strong pipeline of automotive and industrial customers for the next years, with many programmes ramping up from 2021,” Monti says.
“ST targets a market share above 30% in 2025, with about $1 billion revenue,” he adds. “This is a long-term perspective, although we do expect to reach $200 million revenue in [financial year] 2019.”