As the Chinese government becomes cautious about how it subsidizes the country's SiC semiconductor development, the gap between leading SiC companies and those falling behind has widened. Sources said the former will likely receive the government's support more quickly, while the latter is expected to struggle.
Semiconductor suppliers said SiC companies that hold production capability and have been recognized by customers have obtained various business opportunities. For example, Shandong-based SICC has partnered with automotive tier-1 Bosch. SICC and Beijing-based TankeBlue signed a contract with Infineon. Sanan Optoelectronics also will build a SiC wafer fab with STM.
Although some Chinese SiC suppliers have yet to receive certifications from leading international players, they are backed by end customers on their home turf. Some other companies cannot build partnerships with global companies because their affiliates are connected to the blacklist of the US. Moreover, the Chinese government is said to prevent foreign companies from investing in SiC suppliers that have great potential. The act is to ensure China's SiC technology will become competitive in the future.
Sources said only five China-based companies can boast SiC crystal growth expertise, less than one might expect. However, these companies will thrive and expand as the China government tends to support industry leaders. Those lagging will unlikely be optimistic about their future.
China has been fostering local SiC semiconductor production for about 10 years, according to suppliers. The field was too crowded as many companies joined the race to receive subsidies.
The Chinese government has implemented several rules to reorganize the SiC segment. For example, companies are not allowed to include the sales of moissanite, a SiC by-product, in the accessory market in the sales of its main business. New entrants also have to obtain more approval from the central and local governments.
As China sees an economic downturn, those in the SiC segment who have not proved themselves will face more challenges in winning government support and recruiting talent.
Sources said not many talents have experience in SiC crystal growth worldwide. In the past, those who do not have solid knowledge in the field can still thrive in China. Companies may receive government subsidies even if they do not enter production. It is said that the Chinese government made a list a few years ago to track some industry professionals likely to disrupt the market.
