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From "Price War" to "Comprehensive Price Hikes": Domestic SiC Leaders Complete Global Positioning

On June 9, the silicon carbide (SiC) sector heated up in the A-share market. Jingsheng Mechanical & Electrical hit the daily limit with high volume, while SICC, Zing Semiconductor, Silan Microelectronics, and others rose collectively. Looking at the longer term, over the past three months, the SiC concept has become one of the best-performing sectors in the tech track.

Entering 2026, Infineon initiated price hikes for the second time this year, firing the first shot, followed closely by international giants like STMicroelectronics. Domestic substrate and device manufacturers have also adjusted prices, launching a "comprehensive price hike" mode across the industry. From "price wars" to "capacity grabs," the narrative logic of SiC has been completely rewritten.

An executive from a listed power semiconductor company believes that downstream demand is robust, current capacity cannot keep up with customer needs, delivery cycles have significantly lengthened, and some solar/storage customers are actively paying premiums to secure goods. Hong Yuan, a senior analyst at InSemi Research, confirmed that the capacity utilization rates of leading SiC substrate manufacturers such as SICC and TanKeHeDa have both exceeded 90%.

Dual Demand Engines: AI Computing Takes Over from New Energy, Opening Hundreds of Billions in Incremental Space

Silicon Carbide (SiC), as a third-generation wide-bandgap semiconductor material, has become an irreplaceable key material in the power semiconductor field due to its advantages in high voltage resistance, high thermal conductivity, and high operating temperatures.

For a long time, new energy vehicles (NEVs) were the primary growth pole for the SiC industry. With the accelerated ramp-up of 800V high-voltage platform models, the penetration rate of SiC in NEVs continues to rise. Forecasts suggest that by 2026, the penetration rate of SiC in NEVs will reach 40%. On 400V platforms, replacing silicon-based IGBTs with SiC power devices can improve operational efficiency by 1%-1.5%, corresponding to a range increase of 2%-3%; on 800V high-voltage platforms, the efficiency gain is more significant, improving overall vehicle operational efficiency by 3%-4% and range by 5%-8%. On the cost side, it saves $400 to $800 in battery costs per vehicle.

The landscape changed profoundly in 2026. The explosive growth of AI data centers is opening a new incremental track for the SiC industry, becoming a second growth pole alongside NEVs. Huaxi Securities research explicitly states that the demand growth potential for SiC in AI-related fields is huge, with AI-related demand "far exceeding traditional markets like automotive," positioning SiC as a new main line for AI.

According to Citrini's forecast, by 2030, AI power supplies will account for 50% of the SiC power supply market. Based on this estimate, demand for SiC substrates and equipment in the power supply market could grow nearly 10-fold. Looking further ahead, industry insiders judge that the SiC substrate market is expected to break through from the current tens of billions scale to a level of 200-300 billion.

More notably, SiC applications are extending into advanced packaging heat dissipation. TSMC's CoWoS capacity will reach 1 million wafers per month in 2026; if 30% adopt SiC interposer solutions, the potential space exceeds $1 billion, opening a new growth path for the industry.

Reshaping Global Capacity Landscape, Domestic Supply Chain Breaks Through Strongly

The surge in demand is resonating with violent restructuring on the supply side. The global SiC industry is facing a historic turning point.

In 2025, the SiC market experienced a brutal capacity clearance. Massive low-end 6-inch capacities were accelerated out of elimination, shifting the industry from "overcapacity" to a "delicate weak balance." Under the reversal of supply-demand patterns, price signals confirmed first. Prices for 6-inch SiC substrates rebounded significantly, while 8-inch prices stopped falling, stabilized, and rose slightly; downstream substrate manufacturers have received new order demands, and some have started price hike procedures. Equipment orders surged simultaneously; core equipment makers like Jingsheng Mechanical & Electrical, Xinyichang, and Liandong Tech have SiC backlog orders reaching more than double last year's levels.

Changes among overseas giants are even more symbolic. Wolfspeed, the US leader previously plagued by huge losses due to aggressive expansion, has seen its status as the world's top shipper shaken. The company closed its 6-inch lines early, shifting capacity focus entirely to 8-inch factories—although this "amputation" move pressured short-term financial reports, it is viewed as necessary pain for long-term cost competitiveness.

Infineon explicitly set its FY2026 AI-related sales target at €1.5 billion, planning to raise it to €2.5 billion in 2027. STMicroelectronics' integrated SiC substrate manufacturing facility in Catania, Italy, is scheduled to go live in 2026, while its joint venture with San'an Optoelectronics in Chongqing for an 8-inch project is entering the mass production sprint phase.

Amid this global reshaping, the rise of Chinese forces is particularly notable. Localization rates are rising rapidly, especially in the substrate segment. For instance, SICC has surpassed Wolfspeed to become the world's #1 substrate shipper, with 8-inch product yield around 70%, capturing nearly half of the global market share, covering top-tier clients like Bosch, Tesla, and Infineon. Its global market share for 8-inch SiC substrates reached 51.3%. TanKeHeDa remains firmly domestic #2, focusing on clients like Huawei and BYD.

Overall, domestic manufacturers are quickly establishing dominance in the global SiC supply chain. Following the domestic supply chain for humanoid robots, SiC is becoming another example of "Made in China" attacking the next high-end track.

Market is Repricing SiC

High sector prosperity is fully reflected in capital flows. On June 9, the SiC concept rose 7.16% intraday, and the third-generation semiconductor concept rose 6.11%, showing significant sector effects. Recently, Jingsheng Mechanical & Electrical's shareholder inquiry transfer at the end of May received 3.11x oversubscription from institutions, reflecting industrial capital's high recognition of the SiC track. The STAR Materials ETF (588010) absorbed 20.4832 million yuan in the last 10 trading days, indicating a clear trend of continuous capital inflow.

Institutions have formed a high consensus. Huaxi Securities believes that with AI development, SiC has shown a reversal trend this year, and the market may reprice the SiC industry, with substrate and equipment companies benefiting most. Changjiang Securities judges that the SiC industry is facing a historic turning point of "demand expansion + supply restructuring." Leading enterprises with technical barriers, vertical integration capabilities, and deep client ties will fully capture the dual dividends of "computing β + localization α," elevating SiC from a material supplier to a core enabler of computing infrastructure. Morgan Stanley increased its holding in SICC's H-shares by 942,700 shares on May 28, worth about HK$117 million, raising its stake to 6.40%, clearly showing foreign institutions' bullish stance on domestic SiC leaders.

From the perspective of value distribution in the supply chain, upstream substrates and epitaxy account for about 70% of the total value, making them the core focus of competition. Enterprises with a high proportion of 8-inch and larger products possess stronger pricing power and sustained profitability due to higher technical barriers and stronger client stickiness.

On the device side, IDM manufacturers with automotive-grade certifications and mainstream client ties are also key targets for capital allocation. Silan Microelectronics' cumulative shipment of automotive-grade SiC MOSFET modules has exceeded 100,000 units; its 6-inch line monthly capacity reaches 10,000 wafers, and the 8-inch line has gone live. United Nova Technology's SiC MOSFET chips and modules fully cover 650V to 3300V process platforms, with key indicators leading domestically. It achieved ~50% YoY growth in 2025, entering the global top five device suppliers.

Structural Opportunities Focus on Technical and Capacity Leaders

Overall, SiC is transforming from a "supporting role in NEVs" to a "core material for AI computing infrastructure." The current industry reversal is not simple cyclical recovery but a structural long-term logic driven by the triple factors of AI demand explosion, rising NEV penetration, and accelerated localization.

Regarding specific investment directions, two dimensions are worth noting. First, substrate leaders with large-size mass production capabilities and high yields. SICC and TanKeHeDa hold technical and capacity advantages in 8-inch and 6-inch domains respectively. As dominant forces reshaping the global supply chain, they will benefit fully from sustained downstream demand ramp-up. Second, IDM manufacturers with vertical integration capabilities (substrate + epitaxy + device).

San'an Optoelectronics' 8-inch joint venture with STMicroelectronics has entered risk production. Silan Microelectronics effectively dilutes costs with its "6-inch SiC + 12-inch Silicon" hybrid manufacturing model, expecting its SiC line to reach full capacity in 2026. Additionally, core equipment suppliers like Jingsheng Mechanical & Electrical directly benefit from the industry-wide expansion wave, with backlog orders clearly reflecting the prosperity trend.

However, risks cannot be ignored. Technically, the industry is in a critical period of 8-inch mass production ramp-up; yield improvement and cost control will be core variables determining enterprise profitability. If global capacity release exceeds expectations, prices may face pressure again. Geopolitically, the SiC supply chain involves high-end equipment and raw material imports. Although Chinese manufacturers lead globally in substrates, there remains external dependence on key equipment and special materials. Furthermore, current SiC prices are still 3-5 times higher than silicon-based IGBTs; the speed of further cost reduction will determine the pace and breadth of penetration in more mid-to-low-end applications.