In-depth analysis of the power semiconductor market and opportunities (multi-image collection version)

Power semiconductor devices are core devices for achieving power conversion. Their main uses include inverter and frequency conversion. Benefiting from the significant growth in demand for 5G and electric vehicles, we are optimistic about the market development of power semiconductors. This article focuses on the new round of development opportunities for IGBT/third-generation compound semiconductor power devices driven by technology advancement and application .

1.1. Overview of power semiconductors

Power semiconductor devices are core devices for realizing electric energy conversion, and their main uses include inverter and frequency conversion. Power semiconductors can be divided into bipolar power semiconductors and unipolar power semiconductors according to the carrier type.

Bipolar power semiconductors include power diodes, bipolar junction transistors (BJTs), power transistors (GTRs), thyristors, insulated gate bipolar transistors (IGBTs), etc. Unipolar power semiconductors include power MOSFETs, Schottky barrier power diodes, etc. Their operating voltages and operating frequencies are also different.

Power semiconductor devices are widely used in power electronics fields such as consumer electronics, new energy transportation, rail transportation, power generation and distribution. Benefiting from the significant growth in demand for 5G and electric vehicles, we are optimistic about the market development of power semiconductors.

1.2. Power semiconductor market landscape

International manufacturers have a high level of manufacturing and have formed a high professional barrier. We expect the global power semiconductor market to reach $42.6 billion in 2022. In the global power semiconductor market in 2015, Infineon ranked first with a market share of 12%. European, American and Japanese manufacturers have occupied 70% of the global power semiconductor device market with their technological and brand advantages .

Mainland China and Taiwan are mainly concentrated in the low-end power device market such as diodes and low-voltage MOSFETs, while the high-end device market such as IGBTs and medium- and high-voltage MOSFETs is mainly occupied by European, American and Japanese manufacturers.

We are optimistic about the domestic substitution space for power semiconductors. China started research on power semiconductors relatively late, and was limited by funds, technology and talents. The power semiconductor industry as a whole is characterized by a small number of companies, small scale of enterprises, low technical level and scattered industrial layout. The problem of original innovation has become an important factor hindering the development of the domestic power semiconductor industry.

International power semiconductor manufacturers There is no monopoly on patents and standards . Compared with foreign manufacturers, domestic manufacturers have competitive advantages in serving customer needs and reducing costs. We believe that there is a huge space for domestic substitution of power semiconductors.

1.3. Automotive electronics ignites the power semiconductor market

New energy vehicles have brought great growth potential to power semiconductors. New energy vehicles refer to vehicles that use unconventional automotive fuels as a power source, such as pure electric vehicles and plug-in hybrid vehicles. We expect that China's new energy vehicle sales will reach 2 million units in 2020, a year-on-year increase of 53.8%. New energy vehicles have added a large number of power semiconductor devices.

The global automotive power semiconductor market size will reach 7 billion US dollars in 2020. The three-phase asynchronous motor drive used in the Tesla Model S requires 28 IGBT chips for each phase of the drive control, and a total of 84 IGBT chips are required for the three phases.

China's Ministry of Finance and State Administration of Taxation jointly issued an announcement: From January 1, 2018 to December 31, 2020, new energy vehicles purchased will be exempted from vehicle purchase tax to encourage users to purchase new energy vehicles. We believe that the policy dividend will fully drive the market demand for power semiconductors .

IGBT (Insulated Gate Bipolar Transistor), insulated gate bipolar transistor, is a composite fully controlled voltage-driven power semiconductor device composed of BJT (bipolar transistor) and MOS (insulated gate field effect transistor). IGBT can realize the conversion between direct current and alternating current or change the frequency of current, and has the functions of inverter and frequency conversion.

In terms of structure, IGBT has one more P+ region than MOSFET. The injection of holes in the P layer can reduce the on-resistance of the device. As the voltage increases, the on-resistance of MOSFET also increases, so its conduction loss is relatively large, especially in high-voltage applications. In comparison, the on-resistance of IGBT is smaller.

IGBT is mostly used in high-voltage fields, while MOSFET is mainly used in high-frequency fields. From the product point of view, IGBT is generally used in high-voltage products with a voltage range of 600-6500V. The application voltage of MOSFET is relatively low, ranging from a dozen volts to 1000V. However, the operating frequency of IGBT is much lower than that of MOSFET. The operating frequency of MOSFET can reach more than 1MHz, or even tens of MHz, while the operating frequency of IGBT is only 100KHz. IGBT is mainly used in high-voltage products such as inverters and frequency converters. MOSFET is mainly used in high-frequency products such as ballasts and high-frequency induction heating.

2.1. IGBT Market Structure

The main competitors in the global IGBT market include Germany's Infineon, Japan's Mitsubishi, Fuji Electric, the United States' ON Semiconductor, and Switzerland's ABB. The top five companies have a market share of more than 70%. We estimate that the global IGBT market size will reach US$6 billion in 2022 , with huge room for growth. Foreign manufacturers have developed a complete IGBT product line.

Among them, Fairchild and other companies have an advantage in the field of consumer-grade IGBTs. ABB, Infineon and Mitsubishi Electric have an advantage in the field of industrial-grade IGBTs above 1700V. In the field of voltage levels above 3300V, Infineon, ABB and Mitsubishi Electric have a monopoly position, representing the highest level of international IGBT technology.

It will take time for domestic products to catch up. China's power semiconductor market accounts for more than 50% of the world's power semiconductor market share , but 90% of mid-to-high-end MOSFET and IGBT devices rely on imports .

2.2. IGBT is widely used, and new energy vehicles are an important downstream growth engine

In terms of voltage distribution, IGBT products used in the consumer electronics field are mainly below 600V, such as digital camera flashlights. IGBTs above 1200V are mostly used in power equipment, automotive electronics, high-speed rail and EMUs. The IGBT modules commonly used in EMUs are 3300V and 6500V. IGBTs used in smart grids are usually 3300V.

2.2.1. New energy vehicles

Motor control systems and charging piles are the main growth points for automotive IGBTs. The electric drive system converts electrical energy into mechanical energy to drive electric vehicles, and is the most critical part of controlling electric vehicles. IGBT is an inverter module in the electric drive system, which converts the DC power of the power battery into AC power to provide it to the drive motor. IGBT accounts for about 40% of the cost of the motor drive system and on-board charging system of new energy vehicles, which is equivalent to about 7-10% of the total cost of the whole vehicle . Its performance directly determines the energy utilization rate of the whole vehicle.

The certification cycle of the automotive semiconductor industry is long and the standards are very strict. On the one hand, the mass consumption attribute of automobiles makes it have relatively high requirements for the life of IGBT. On the other hand, automobiles face more complex working conditions, requiring frequent starting and stopping, climbing and wading, and experiencing different road conditions and ambient temperatures, which are extremely strict tests for IGBT.

2.2.2. Rail transit

In the process of increasing the speed of high-speed rail from zero to 300 kilometers per hour in a short period of time, IGBT is needed to ensure the current and voltage required by traction converters and other electric equipment are accurate and reliable. IGBT has achieved full localization in the field of rail transportation .

2.2.3. Smart Grid

IGBT is widely used in the power generation, transmission, substation and power consumption of smart grids. From the power generation end, rectifiers and inverters in wind power generation and photovoltaic power generation all need to use IGBT modules. From the power transmission end, FACTS flexible power transmission technology in UHV DC transmission requires a large number of IGBT power devices. From the substation end, IGBT is a key device for power electronic transformers. From the power consumption end, household LED lighting and other applications have a large demand for IGBT.

3.1. SiC: A Game-Changer in High-Voltage Devices

SiC is the representative of the third generation of semiconductor materials. As for silicon, the current Si MOSFET applications are mostly below 1000V, about 600~900V. If it exceeds 1000V, the chip size will be very large, and the switching loss and parasitic capacitance will also increase. The advantages of SiC devices over Si devices are reduced energy loss, easier miniaturization and higher temperature resistance. The loss of SiC power devices is about 50% of that of Si devices. SiC is mainly used to achieve small-scale and lightweight drive systems such as electric vehicle inverters.

Figure 16: Switching losses of SiC

Infineon and Cree occupy 70% of the global SiC market. Rohm has installed SiC power devices on Honda's Clarity, which is the world's first fuel cell electric vehicle driven by Full SiC. Due to its high temperature operation and low loss characteristics, the heat sink used for cooling can be reduced and the internal space can be expanded. Toyota's fuel cell vehicle MIRAI can seat 4 people, and Honda's Clarity can seat 5 people.

In 2017, the global SiC power semiconductor market reached a total of US$399 million. It is expected that the total market will reach US$1.644 billion by 2023 , with a compound annual growth rate of 26.6%. In terms of application, hybrid and pure electric vehicles have the highest growth rate, reaching 81.4%. In terms of products, SiC JFETs have the highest growth rate, reaching 38.9%. The second is full SiC power modules, with a growth rate of 31.7%.

The policy support has been greatly enhanced, which has promoted the third-generation semiconductor industry to overtake others. The national and local governments have continued to introduce policies and industrial support funds to support the development of third-generation semiconductors. In July 2018, the first "Third-Generation Semiconductor Power Electronics Technology Roadmap" was officially released, proposing the development path and industrial construction of China's third-generation semiconductor power electronics technology. Fujian Province has invested 50 billion to establish a special Anxin Fund to build a third-generation semiconductor industry cluster.

3.2. GaN——Increasing application scenarios bring development opportunities

Since GaN has a large bandgap, GaN can be used to obtain semiconductor devices with larger bandwidth, larger amplifier gain, and smaller size. GaN devices can be divided into RF devices and power electronic devices. GaN RF devices include PA, MIMO, etc. for base station satellite and radar markets. Power electronic device products include SBD, FET, etc. for wireless charging, power switch and other markets.

Infineon, ON Semiconductor and STMicroelectronics are industry giants in the global GaN market. We expect the global GaN power device market to reach US$440 million by 2026 , with a compound annual growth rate of 29.4%. In recent years, more and more companies have joined the GaN industry chain. For example, start-ups such as EPC, GaN System, and Transphorm. Most of them choose TSMC or X-FAB as foundry partners. Industry giants such as Infineon, ON Semiconductor and STMicroelectronics adopt the IDM model.

3.3. SiC vs. GaN: Each has its own strengths, driven by applications

3.3.1. Basic features

SiC is suitable for high voltage, while GaN is more suitable for low voltage and high frequency. The larger bandgap reduces the on-resistance of the device. The higher saturation migration velocity enables both SiC and GaN to obtain faster and smaller power semiconductor devices. However, an important difference between the two is thermal conductivity, which makes SiC dominant in high power applications. GaN has an advantage in high frequency because it has a higher electron mobility and can achieve a higher switching speed. SiC is suitable for high voltage fields above 1200V, while GaN is more suitable for high frequency fields of 40-1200V.

Currently, the highest operating voltage of commercial SiC MOSFET is 1700V, the operating temperature is 100-160℃, and the current is below 65A. The main products of SiC MOSFET are 650V, 900V, 1200V and 1700V. Among the new SiC products launched by major international manufacturers in 2018, Cree's new E series SiC MOSFET is the only SiC MOSFET in the industry that has passed the automotive AEC-Q101 certification and meets PPAP requirements.

The current maximum operating voltage of commercial GaN HEMT is 650V, the operating temperature is 25℃, and the current is below 120A. The main products of GaN HEMT are 100V, 600V and 650V. Among the new GaN products launched by major international manufacturers in 2018, GaN Systems' GaN E-HEMT series achieved the highest current level in the industry, while increasing the system's power density from 20kW to 500kW . The GaN HEMT produced by EPC is its first GaN product to obtain automotive AEC-Q101 certification. Its volume is much smaller than that of traditional Si MOSFET, and its switching speed is 10-100 times that of Si MOSFET .

The maximum operating voltage of commercial SiC power modules is currently 3300 V. In January 2018, Mitsubishi Electric developed a full SiC power module that achieved the industry's highest power density (9.3 kVA/cm3) through the integrated design of SiC MOSFET and SIC SBD.

Currently, the highest operating frequency of commercial GaN power amplifiers is 31GHz. In 2018, MACOM, Cree and other companies successively launched GaN MMIC PA modular power products for base stations, radars and other application markets.

3.3.2 Application scenarios

SiC is mainly used in photovoltaic inverters (PV), energy storage/battery charging, uninterruptible power supply (UPS), switching power supply (SMPS), industrial drives and medical markets. SiC can be used to achieve small-scale and lightweight drive systems such as electric vehicle inverters.

Mobile phone fast charging occupies the largest share of the power GaN market. When GaN is used in chargers, it can effectively reduce the size of the product. Currently, GaN chargers on the market support USB fast charging, with 27W, 30W and 45W power being the most common. Apple, a leading smartphone manufacturer, is also considering using GaN technology as its wireless charging solution, which may bring about a killer application in the GaN power device market .

With the advent of 5G applications, the RF GaN market is developing rapidly. The main frequency bands deployed by 5G are sub-6-GHz for wide-area coverage and above 20GHz for high-density areas such as airports. To meet 5G's requirements for higher data transmission rates and low latency, GaN technology is needed to achieve higher target frequencies. High output power, linearity, and power consumption requirements have also driven the conversion of PAs deployed in base stations from LDMOS to GaN. In addition, in Massive MIMO, a key technology of 5G, a large number of array antennas are used on base station transceivers. This structure requires corresponding RF transceiver units, so the number of RF devices used will increase significantly. The small size and high power density of GaN can be used to achieve highly integrated product solutions, such as modular RF front-end devices .

Figure 26: Power semiconductor market demand brought by 5G

We deduce the market demand for power semiconductors brought about by new energy vehicles based on the per-vehicle value of power semiconductors and the global sales volume of new energy vehicles.

IGBT is the core component of the motor control system of new energy vehicles. The three-phase asynchronous motor drive used in Tesla Model S requires 28 IGBT chips for each phase, and a total of 84 IGBT chips for the three phases. The price of each chip is about 4 to 5 US dollars. We estimate that the value of IGBT per vehicle is about 420 US dollars . Based on the global sales of new energy vehicles, the IGBT market demand brought by new energy vehicles can be deduced.

SiC is mainly used to achieve small-scale and lightweight drive systems such as inverters for new energy vehicles. In 2018, Tesla Model 3 inverters used SiC MOSFETs manufactured by STMicroelectronics, and each inverter included 48 SiC MOSFETs. The body of Model 3 is 20% smaller than that of Model S. The price of each SiC MOSFET is about US$50. We estimate that the value of SiC per vehicle is about US$2,500 .

The application of GaN technology in automobiles is just beginning to develop. EPC's GaN HEMT is its first GaN product to obtain automotive AEC-Q101 certification. GaN technology can improve efficiency, reduce size and reduce system cost. These good properties make GaN's automotive application promising in the future.

We estimate the incremental space by measuring the supply and demand of IGBT/SiC in the new energy vehicle market. Thanks to the significant growth in demand for new energy vehicles, we believe that the incremental space for IGBT is huge. The SiC market may be in short supply. High cost is an important factor restricting international manufacturers from expanding SiC production capacity.

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