Key investment points
Why should we pay attention to silicon carbide materials? On the one hand, silicon based semiconductors face the failure of Moore's law. As a third-generation semiconductor material, silicon carbide has performance advantages such as wider band gap, higher breakdown electric field and higher thermal conductivity. It has excellent performance in the fields of high temperature, high voltage and high frequency, and is expected to become the main direction of technological breakthrough in the future.
On the other hand, silicon carbide devices take the substrate as the core, accounting for about 55% of the cost in wafer manufacturing. They have relatively low requirements for semiconductor equipment, which is conducive to avoiding the problem of Chinese semiconductor equipment being stuck. It is the direction of overtaking in the corner of China's semiconductor industry in the future. In addition, third-generation semiconductors have important applications in the field of national defense. They are strictly embargoed and blocked by the Wassenaar agreement. They are areas that domestic substitutes must break through. At present, the 14th five year plan clearly proposes to vigorously develop silicon carbide, gallium nitride and other wide band gap semiconductor industries. Important ministries and commissions such as the Ministry of science and technology and the Ministry of industry and information technology have also successively issued detailed rules and documents. With the strong support of policies, the 14th Five Year Plan period is expected to become an era of rapid development of China's third-generation semiconductor industry.
The growth rate of the downstream PV industry and the price gap of the downstream PV industry will continue to shrink by 34% in the next five years. Silicon carbide wafer has gradually transitioned to 6 inches, and the price difference with Si based products continues to narrow. The price is about 4 times that of the same type of Si based products. In the future, the price decline of products is expected to remain at 10% - 20% every year, and gradually reduce to about 2 times that of Si based products in 3-5 years, which is very alternative and cost-effective. New energy vehicles and photovoltaic are the downstream core application fields of silicon carbide. Under the national dual carbon strategy, the industry boom is high, which is the downstream core application driving the demand for SiC devices. According to yole data, in 2020, the market scale of SiC devices will be 596 million US dollars. By 2025, the industry scale is expected to grow to 2.562 billion US dollars, with a compound annual growth rate of 33.6%.
The industry concentration is high, American enterprises occupy the core voice, and Chinese manufacturers begin to rise with the support of policies and industry leaders. Silicon carbide long crystal is difficult, slow, and difficult to cut. The silicon carbide substrate industry has high technical barriers. At present, the global silicon carbide substrate market is highly concentrated, and American enterprises occupy the core voice. Wolfspeed (USA) is a global silicon carbide leading enterprise, accounting for 33% of the global semi insulating silicon carbide substrate market share and 62% of the global conductive silicon carbide substrate market share, and has an absolute voice in the global silicon carbide substrate field. Chinese enterprises started relatively late and the time of mass production lags behind. However, relying on national policies and the support of China's downstream leading enterprises, they have been able to reach the 6-inch mass production level, and the technical parameters of substrates with the same size are not much different from those of international leaders, and the product quality has reached the international advanced level. At present, Tianyue advanced is a leading enterprise of semi insulating substrates in China. It has developed rapidly in the past two years. The global market share in the field of semi insulating substrates has increased significantly from 18% in 2019 to 30%. Tiankeheda is a leading enterprise of conductive silicon carbide substrate in China. Taking advantage of the east wind of Shanxi Guoxin Energy Corporation Limited(600617) development, the global market share of conductive silicon carbide substrate has reached 1.7%.
Investment suggestion: as the core material of SiC devices, silicon carbide substrate is strictly embargoed and blocked overseas. It is an area that must be broken through for domestic substitution. At present, China's policy support documents have been implemented one after another, and the industry is expected to usher in great development during the 14th five year plan period. In addition, the price difference between SiC Based Products and Si based products continues to narrow, which will be highly alternative cost-effective in the future. With the national dual carbon strategy, there is strong demand in the downstream new energy vehicles and photovoltaic industry, and the penetration rate of silicon carbide is expected to increase rapidly. It is suggested to pay attention to Tianyue advanced, the leading enterprise of semi insulating substrate in China, tiankeheda, the leading enterprise of conductive silicon carbide substrate, and Starpower Semiconductor Ltd(603290) , the leading IGBT of SiC in strategic layout.
Risk factors: the downstream demand of new energy vehicles and photovoltaic is lower than expected; Sino US scientific and technological disputes have intensified, and the blockade of overseas technology, equipment and raw materials has escalated; The R & D of new products and technologies is less than expected; The capacity expansion of domestic manufacturers is less than expected; The penetration of silicon carbide devices is less than expected.
