China eager to use third-generation chips

Some technology experts said that mainland China is expected to have strong demand for third-generation semiconductors in the next few years. These semiconductor products are mainly used in power grids, electric vehicles and telecommunications base stations.

The new generation of chips, also known as composite chips, are made of wide-bandgap materials such as silicon carbide (SiC) and gallium nitride (GaN). They are suitable for power devices and can operate in high-temperature, high-frequency and high-voltage environments.

TrendForce stated that the value of the global SiC power device market will climb from US$1.61 billion in 2022 to US$5.33 billion in 2026, with a compound annual growth rate (CAGR) of 35%. The annual growth rate of GaN power devices will increase from US$180 million in 2022 to US$1.33 billion in 2026, with a CAGR of 65%.

Some analysts say that since the industry is not covered by U.S. sanctions, China can cultivate its own wafer foundries and may one day be able to supply third-generation semiconductor chips on its own.

"The development of the SiC market is strongly driven by the new energy industry, especially the strong demand for new energy vehicles," TrendForce analyst Rany Gong (Mr. Gong) said at a recent seminar in Shenzhen.

Mr. Gong said he expects sales of automotive silicon carbide power devices to grow from $1.09 billion in 2022 to $3.98 billion in 2026, a CAGR of 38%.

"The prospects of GaN chips in the automotive market are also growing, but more efforts are needed from industry players," he said. "The GaN market is now mainly driven by consumer electronics, as GaN chips are suitable for fast charging devices." GaN chips will be used in car chargers and DC-DC converters around 2025, and in power inverters by 2030.

"The third generation of semiconductors can be widely used in new energy, transportation and optoelectronics, helping China achieve its emission peak and carbon neutrality goals," Cao Jianlin, director of the Steering Committee of the China Advanced Semiconductor Industry Innovation Alliance (CASA), said at a meeting held in Beijing in late May stated at the seminar.

Cao said that the global semiconductor market entered a down cycle last year, but due to strong demand from the automotive, solar and energy storage industries, the third-generation chip market continued to grow and entered a period of rapid growth. He said that China would one day be able to provide the necessary components for itself.

Gan Yong, academician of the Chinese Academy of Engineering and director of the National New Materials Industry Development Strategy Advisory Committee, said that the increased use of third-generation chips will have a crucial impact on the development of the global semiconductor industry in the next decade. He added that the global development of the chip industry Change is unstoppable.

In October last year, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) implemented new restrictions on mainland China’s chip industry. According to BIS restrictions, mainland Chinese fabs that produce 16nm or lower process node chips must apply for a license to purchase semiconductor equipment and other products from the United States.

In January this year, Japan and the Netherlands agreed to join the United States in restricting mainland China's access to advanced semiconductor equipment. In April this year, Japan said that suppliers of 23 chip technologies would need to obtain government approval as early as July before exporting to, including, mainland China. countries and regions.

Some analysts say U.S. restrictions will not prevent China from making third-generation chips because production is a matter of materials science and does not require high-end lithography technology.

Shenzhen-based Qianzhan Industrial Research Institute said in a research report that the trade war with the United States has actually made China more focused on producing third-generation chips. The company said sales of SiC and GaN power devices in China increased from 2017 to 2017. It will grow from RMB 1.79 billion in 2021 to RMB 7.17 billion in 2021, with a CAGR of 300%.

The company said that in the five years to 2027, sales of SiC and GaN power devices in mainland China will increase by an average of 45% per year to 66 billion yuan, while sales of GaN microwave RF devices will increase by 22% per year during the same period. Reaching 24 billion yuan.

China Science and Technology News, a magazine published by the China Association for Science and Technology, published an article stating that the third-generation chip field is an area where China can surpass the West in the future.

The third-generation chip manufacturing process is usually between 90-350nm. These sizes are not subject to US sanctions. Among them, GaN microwave radio frequency chips can be used for missiles, radars and electronic countermeasures designed to deceive radars, and SiC chips can be used for jets and tanks. and naval ship engines and wind tunnels.

CASA President Wu Ling said last month that China should seek to be self-sufficient in chips to meet the huge demand in the telecommunications, energy, transportation and defense industries. She noted that the country still lacks long-term stable investment in scientific research, a platform to evaluate research results and a mechanism to encourage private capital to invest in the sector.

Some analysts say it will not be easy for mainland China to catch up with the West in the third-generation chip field in the short term because foreign companies including Wolfspeed, Rohm, Infineon, Mitsubishi and STMicroelectronics still own the core technology.

Currently, major industry players in mainland China include China Resources Microelectronics, Sanan Optoelectronics, Hangzhou Silan and Zhuzhou CRRC Times Electric Co., Ltd.

On June 7, STMicroelectronics said it had signed an agreement with China's Sanan Optoelectronics to establish a new SiC device manufacturing joint venture in Chongqing.