Infineon And Wolfspeed - Who Next?

Yole Développement predicts more collaborations within the SiC power business

Above: Power electronics and RF power: Infineon's acquisitions and market positioning

Last week, Infineon Technologies' acquisition of Wolfspeed for $850 million caused a stir in the compound semiconductor industry. 

With very recent mergers of International Rectifier and Infineon Technologies, Fairchild Semiconductor and ON Semiconductor, Wolfspeed and APEI , the power industry is evolving fast. So who will be next?

"At Yole, we see this acquisition as the beginning of a series of impressive collaborations within the SiC power business in the coming years," says Pierric Gueguen, business unit manager at the market research company Yole Développement." And this industry trend is likely to continue and to further increase in the future."

This latest acquisition comes in a power electronics industry where SiC technology benefits are well-known and where business opportunities have been clearly identified by industrial companies.

Both Wolfspeed and Infineon Technologies are market leaders and this pact reinforces their dominant market position, accordng to Yole. The deal also includes the related SiC wafer substrate business for power electronics and RF power electronics.

According Hong Lin, analyst at Yole Développement, Infineon Technologies market share should increase more than 50 percent if the full acquisition is confirmed.

"Wolfspeed and Infineon Technologies are leaders in the SiC power devices industry. The combination of both players will clearly strengthen the leading position of Infineon Technologies in the SiC power business," explains Lin, Technology & Market Analyst at Yole. "This is a win-win acquisition."

Lin provides the following analysis:

First, Infineon Technologies and Wolfspeed are both established SiC diodes players.

Wolfspeed has developed a powerful SiC MOSFET solution, which is clearly more advanced than Infineon Technologies' solutions, within the commercialisation phase: Wolfspeed's Gen 3 has already been commercially available for two years and has a good reputation. From its side, Infineon Technologies just released its MOSFET component in May 2016. Within a SiC MOSFET market that is just taking off, Infineon's acquisition of Wolfspeed ensures its development in this market segment.

In parallel, as number one in the incumbent silicon power business, Infineon Technologies has a well-established client portfolio. The German company has a strong understanding of the market's needs, its players, and the technical specifications related to power electronics applications. 

The company also has significant experience in power packaging for semiconductors, which is considered the main SiC business bottleneck for power electronics today. Last year, Cree's division, Wolfspeed acquired APEI to reinforce their packaging capability. Today, with the support from Infineon Technologies, Wolfspeed can further accelerate their product development and reaffirm the leadership of its technology approach.

Finally, Infineon's investment and large-scale production capability could support Wolfspeed in ramping up production and expansion.

This acquisition includes more than just Wolfspeed's SiC devices for power electronics applications. It also includes the company's activities focused on GaN on SiC for RF applications.

According to Yole's report GaN RF Devices Market: Applications, Players, Technology, and Substrates 2016-2022 (Yole Développement, June 2016), the GaN RF devices market will double in the next five years, thanks to widespread adoption within various market segments. As a result, Wolfspeed's merger with Infineon gives them direct access to the emerging GaN RF market.

Infineon Technologies reaffirms its leading market position with both acquisitions during an 18-month period (from Jan. 2015 to Jul. 2016). The company secures its activities within the emerging WBG technology sector.

In its latest compound semiconductor technology & market analysis report Power SiC 2016: Materials, Devices, Modules, and Applications (June 2016, Yole Développement), the Yole announced a $200 million market in 2015 and a 19 percent CAGR between 2015 and 2021, reaching $550 million by the period's 

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