In January, China Resources Micro announced the construction of the country's largest power semiconductor production base in Chongqing. Earlier last year, Silan Micro also revealed plans to build two 12-inch specialty process lines in Xiamen, focusing on MEMS and power semiconductor manufacturing. These two major projects are set to drive the domestic power semiconductor industry into a new phase of growth. As a critical segment of the broader semiconductor sector, power semiconductors play a vital role in energy efficiency, transmission, conversion, storage, and control. They are essential for achieving energy savings, emission reductions, and sustainable manufacturing. With this momentum, how will the power semiconductor market evolve in 2018? Can China’s power semiconductor industry follow the rapid trajectory of the IC industry?
**Application Market: Automotive and Industrial Sectors Driving Growth**
Power semiconductors are used to control circuit switching, enabling functions like rectification, inversion, and frequency conversion. Devices with a rated current exceeding 1 ampere are typically classified as power semiconductors, capable of handling voltages ranging from a few volts to tens of thousands. Common types include MOSFETs, IGBTs, FRDs, VDMOS, and high-power thyristors (GTO).
From a market perspective, the demand for power semiconductors began to rise in the second half of 2016 and continued to grow thereafter. According to IHS Markit, the global power semiconductor market, including discrete components and modules, reached $38.3 billion in 2017, showing an increase of about 7.5%. Infineon’s Industrial Power Control Division head in China, Yu Dehui, expressed continued optimism for 2018, especially regarding China’s growing market.
Power semiconductors are widely used in automotive, home appliances, solar energy, wind power, and rail transit, becoming integral to daily life. A key driver of demand is the rapid expansion of the electric vehicle (EV) market. China, the world’s largest EV market, produced over 517,000 units in October 2017, up 45.63% year-on-year. Industry data suggests that IGBTs account for about 10% of an EV’s total cost. The Chinese government’s “13th Five-Year Plan†aims to produce more than 2 million EVs annually by 2020, with cumulative sales exceeding 5 million.
Another promising area is the Industrial Internet of Things (IIoT), driven by China’s “Made in China 2025†initiative. This strategy aligns with Industry 4.0, pushing for advanced manufacturing. Emerging demands in IIoT create opportunities for semiconductors such as sensors, microcontrollers, and power devices.
**New Production Lines: Silan Micro and China Resources Invest Heavily**
Despite the gap between Chinese manufacturers and global leaders, domestic companies are making progress. CCID Consulting noted that leading firms are integrating overseas resources and moving toward high-end markets. This trend is expected to lead to a surge in the power semiconductor industry in 2018, similar to the IC industry.
Silan Micro announced plans to build two 12-inch 65nm-90nm specialty lines in Xiamen, with a combined investment of over 22 billion yuan. Meanwhile, China Resources Micro signed agreements to establish a national R&D center and a large-scale manufacturing hub in Chongqing, enhancing the local industrial chain and promoting integrated circuit development.
**New Materials: SiC and GaN Lead the Charge**
The evolution of semiconductor materials has gone through three generations: first-generation silicon (Si), second-generation gallium arsenide (GaAs), and third-generation wide-bandgap materials like silicon carbide (SiC) and gallium nitride (GaN). Third-generation materials offer superior thermal conductivity, radiation resistance, and electron saturation speed, making them ideal for high-temperature and high-frequency applications.
SiC-based power semiconductors have matured significantly, with the market reaching around $210–240 million in 2016. Yole predicts it will grow to $550 million by 2021, with a CAGR of 19%. While GaN technology lags behind, it has seen rapid development since 2017. Infineon plans to launch high-frequency power GaN products, which can improve power density by 10 to 100 times compared to traditional silicon.
China is also advancing in GaN technology. In November 2017, Inoxec launched its 8-inch silicon-nitride production line, becoming the first in China to mass-produce GaN. China Resources Micro is investing in a GaN-focused compound semiconductor project, with two phases totaling 5 billion yuan.
With strong investments, technological advancements, and expanding application areas, the Chinese power semiconductor industry is well-positioned for significant growth in the coming years.
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