Whereas chipmakers, reminiscence distributors, and fabs collectively bemoan sluggish demand and extra inventories, one section of the semiconductor biz seems to be weathering the storm higher than most: silicon carbide (SiC) energy circuits utilized in electrical autos.
Throughout its Q2 earnings name Monday with analysts, US-based On Semiconductor reported $576 million in income, up 26 p.c year-on-year, from $2.09 billion in revenues. However whereas gross sales as an entire remained unremarkable through the quarter, up about $10 million from the year-ago quarter, the biz claimed Q2 income from silicon carbide elements elevated four-fold from the yr prior.
“Our worldwide groups are firing on all cylinders, nicely, perhaps I ought to begin saying they’re spinning all motors now,” CEO Hassane El-Khoury joked on the decision with Wall Avenue. “In Q2 alone we signed greater than $3 billion of latest silicon carbide LTSA (long run service agreements).”
Wafer shipments nonetheless down, however chipmakers are trying up READ MORE
The remark is becoming as El-Khoury says the auto trade, already one of many firm’s largest buyer bases, accounts for 90 p.c of Onsemi’s SiC gross sales as we speak. New prospects in Q2 included Vitesco, BorgWarner, and Magna, all of that are utilizing the producer’s SiC chips in merchandise aimed toward electrical automobile producers.
Silicon carbide chips have turn out to be a well-liked selection amongst automakers as they transfer to affect their fleets. SiC is extra environment friendly at increased voltages frequent in electrical autos. As such, it is more and more frequent to seek out SiC within the traction inverters and the DC-to-DC inverters utilized in EVs. In line with chipmakers, this higher effectivity additionally permits for decrease weight, decreased battery put on, and longer ranges for EVs that make use of the tech.
SiC additionally has functions past the automotive sector. The elements are additionally nicely suited to energy circuits utilized in photo voltaic electrical energy methods, vitality storage, motors, and energy provides. Nonetheless, El-Khoury informed analysts on the decision that non-automotive markets solely accounted for about 10 p.c of Onsemi’s SiC gross sales.
Removed from alone
Wanting forward, Onsemi provided a cautiously optimistic outlook for the semiconductor market, forecasting $2-$2.19 billion in revenues for Q3, pushed largely by automotive demand.
Nonetheless, Onsemi is much from the one semiconductor firm seeking to money in on the electrification of the world’s highway transport fleets. The market alternative is tantalizing sufficient that buyers are dumping billions into chip corporations engaged on silicon carbide circuits.
Simply final month, North Carolina-based Wolfspeed, which additionally produces elements utilizing SiC and Gallium Nitride (GaN), introduced a $1.25 billion of secured word financing from an funding group led by Apollo with the potential to obtain one other $750 million.
In the meantime rival chipmakers in Germany and The Netherlands have additionally introduced main investments within the know-how. Again in April German manufacturing large Bosch revealed plans to amass California-based TSI Semiconductors. Below the deal, the German conglomerate would make investments $1.5 billion in TSI’s Roseville, California to retool it for the manufacturing of SiC elements on 200mm wafers.
In the meantime, STMicroelectronics, which produces elements for Tesla, can also be increasing SiC manufacturing, asserting in January the corporate would deliver manufacturing of the chips in home. Throughout the firm’s second quarter earnings name final week, CEO Jean-Marc Chery stated he anticipated silicon carbide circuits to exceed $5 billion in annual revenues by the top of the last decade. ®