Author: Xiao Meng
Recently, silicon carbide (SiC) has been gaining increasing prominence in the semiconductor industry.
As a wide bandgap semiconductor material, it offers lower energy conversion losses than traditional silicon under high-voltage, high-temperature, and high-frequency switching conditions, helping electronic systems improve efficiency. Consequently, it continues to penetrate applications such as NEVs, photovoltaics, energy storage, and industrial power supplies. According to research data from Guosen Securities, from January to May 2026, SiC MOSFETs accounted for 30.9% of the main drive modules in domestically insured NEV passenger vehicles. During the same period, the penetration rate of 800V models among domestically insured NEV passenger vehicles was approximately 33%, with SiC penetration reaching 77%. Beyond this, AI data centers are emerging as a second demand curve. As rack power consumption evolves toward the megawatt level, the losses and thermal bottlenecks of traditional power supply architectures are becoming increasingly prominent, making SiC a must-have rather than an option in high-voltage DC power supplies and solid-state transformers. Yole Group projects that the global SiC power device market will reach approximately USD 11 billion by 2031, driven jointly by applications in NEVs, charging infrastructure, photovoltaics and energy storage, and AI data center power supplies.
While demand-side expansion continues, the focus of industrial competition is also shifting forward toward substrate costs and wafer specifications. On October 15, 2026, Infineon and Wolfspeed announced the expansion and extension of their SiC wafer supply agreement, extending their over20-year partnership from 150mm to 200mm specifications.
This multi-year agreement connects the distinct needs of both companies, offering a window into the development trends of the SiC industry.
01. Why Infineon Needs 200mm SiC Wafers
Infineon has been advancing 200mm SiC manufacturing for some time.
Production line layout serves as a crucial foundation for its 200mm manufacturing push. In February 2025, Infineon announced that the first products manufactured using 200mm SiC wafer technology had begun shipping to customers. These products are manufactured in Villach, Austria, primarily targeting high-voltage applications such as renewable energy, railways, and electric vehicles. Meanwhile, the company's production base in Kulim, Malaysia, is also advancing the transition from 150mm to 200mm wafers, with the newly built Module 3 facility planned to gradually commence large-scale production based on market demand.
The expansion of the supply agreement with Wolfspeed is precisely to support this transition. Infineon explicitly stated in the announcement that the new multi-year agreement will help the company advance its 200mm SiC manufacturing, enhance supply chain resilience, and provide greater flexibility for future business growth.
The most intuitive advantage of wafer size upgrading lies in the increased area per wafer. Using 150mm wafers as a reference, the theoretical area of a 200mm wafer is approximately 1.78 times larger. Under similar conditions for chip size and manufacturing processes, larger wafers can accommodate more chips, increasing the potential output per wafer. Infineon pointed out in relevant announcements that 200mm SiC wafers can increase the usable chip area per wafer, reduce unit substrate costs, and improve overall manufacturing efficiency. For manufacturers needing to scale up power device output, these changes help enhance the economics of large-scale production.
End-market demand also influences Infineon's production line planning. Leveraging its high-voltage and high-efficiency power conversion characteristics, SiC has been applied in NEVs, renewable energy systems, and industrial drives. Infineon has also recently listed AI data center power infrastructure as a significant demand source for SiC power semiconductors. As application fields expand, manufacturers must align product, production line, and raw material supply with market demand to avoid a disconnect between capacity expansion and actual needs.
Regarding the supply chain, Infineon emphasizes a multi-source SiC substrate procurement strategy to maintain supply flexibility and quality assurance capabilities across its global manufacturing network. Expanding cooperation with Wolfspeed adds material supply channels for its 200mm manufacturing layout and helps reduce reliance on a single source. For companies that need continuous production and delivery of power devices to customers, the stability of raw material supply is just as critical as manufacturing capability.
02. Post-Expansion, Wolfspeed Still Faces Profitability Tests
If this long-term supply agreement is viewed as a line connecting the upstream and downstream of the industrial chain, Infineon holds one end, focusing on advancing 200mm SiC manufacturing and securing substrate supply. Wolfspeed stands at the other end, hoping to leverage this partnership to integrate its 200mm material products into the long-term supply systems of major customers, securing potential demand for its material business under pressure.
The decline in materials business revenue is one of the prominent issues Wolfspeed currently faces. According to its Q4 FY2026 results announced in August 2026, for the three months ended June 28, 2026, Wolfspeed's revenue was USD 149.6 million, down from USD 197.0 million in the same period last year. By product, power products revenue was USD 106.3 million, compared to USD 118.6 million a year earlier; materials products revenue dropped from USD 78.4 million to USD 43.3 million, a decrease of approximately 45%. Materials products include bare SiC wafers and epitaxial wafers, directly related to the business involved in this procurement agreement with Infineon.
Wolfspeed further elaborated in its FY2026 annual report that the decline in materials products revenue was mainly due to customers adjusting the timing and scale of substrate procurement. Due to weak end-market demand, customers are rebalancing inventory and procurement plans. Meanwhile, the increase in SiC substrate supply, particularly competition from Chinese suppliers, continues to exert pressure on product prices. The company disclosed that FY2026 revenue decreased by approximately 12% year-over-year, with the reduction in materials business revenue being a primary reason.
Beyond the revenue decline, the negative gross margin also reflects that manufacturing cost pressures have not been fundamentally alleviated. Wolfspeed's GAAP gross margin for Q4 FY2026 was -25%, and the non-GAAP gross margin was -20%. The company's quarterly revenue remained insufficient to cover operating costs.
Insufficient capacity utilization is a significant factor affecting the gross margin. As the materials manufacturing facility in Siler City, North Carolina, gradually becomes operational, Wolfspeed's materials manufacturing capacity has been expanded. However, the company's materials factory in Durham has reduced production loads due to weak end-market demand, requiring adjustments in production scheduling to match market needs. According to the annual report, these factors increased costs related to insufficient capacity utilization, and the company expects such costs to persist until market demand meets or exceeds existing production capacity.
Wolfspeed stated in the annual report that the major expansion projects at the Siler City facility and the Mohawk Valley wafer fab were substantially completed by the end of FY2025. Since then, the company's capital expenditures have continued to decline and are expected to decrease further in FY2027. However, the completion of expansion projects does not mean the end of operational pressures. Whether existing facilities can secure sufficient orders, whether capacity utilization can improve, and whether materials product prices can remain competitive will all continue to impact profitability.
For Wolfspeed, the significance of this partnership lies in providing a new breakthrough for its 200mm SiC materials business. Infineon is advancing 200mm SiC manufacturing, and its related substrate demand directly aligns with Wolfspeed's materials business. By establishing long-term supply relationships with downstream manufacturers, Wolfspeed has the opportunity to further expand the application of its 200mm material products and secure more room for subsequent business development. For Wolfspeed, which currently faces declining materials product revenue and insufficient capacity utilization, such partnerships also help boost market attention to its 200mm materials business.
03. From 150mm to 200mm: The "Aspirations" and "Anxieties" of SiC Wafers
This agreement between Infineon and Wolfspeed reflects the global SiC industry's trend toward larger-sized wafers.
In the past two years, although progress varies, 200mm SiC wafers have become a technological direction pursued by multiple manufacturers. Besides Infineon, Bosch launched its third-generation SiC chips in April 2026 and provided samples to global automakers. Meanwhile, Bosch's Reutlingen, Germany, factory ended 150mm SiC production in May 2026, completing its transition to 200mm wafer manufacturing. STMicroelectronics is also continuously advancing the construction of its 200mm SiC park in Catania, Italy, positioning it as a crucial layout for next-generation power semiconductor manufacturing. Coherent, on the other hand, began shipping 200mm SiC substrates and epitaxial wafers in 2024.
For these manufacturers, the advantages brought by wafer size upgrading are mainly reflected in the output potential per wafer and manufacturing economics. The larger wafer area also provides room for improving production efficiency and reducing unit substrate costs, thereby driving manufacturers' 200mm SiC wafer manufacturing.
However, judging from publicly available progress, 200mm SiC wafers have not yet fully replaced 150mm. The industry remains in a stage where both specifications coexist, with a gradual push for size upgrading.
For manufacturers, transitioning 200mm from product development and process validation to stable mass production still requires time.
The first issue to resolve is the growth of large-size single crystals. SiC substrates are primarily grown using the physical vapor transport (PVT) method, where raw materials sublimate in a high-temperature environment, and the vapor-phase components recrystallize on the seed crystal surface, gradually forming a single-crystal ingot. As the crystal diameter expands, conditions such as temperature distribution, thermal stress, and vapor-phase transport must be readjusted. Companies must not only obtain sufficiently large crystals but also ensure the quality stability of the entire crystal. Reaching the 200mm size requirement for the ingot is merely the starting point for subsequent processing.
Secondly, crystal defects are a crucial factor affecting manufacturing yield. Micropipes, dislocations, and stacking faults may occur during the growth of SiC single crystals. Some defects can affect the breakdown characteristics, leakage performance, and long-term reliability of power devices. The larger the wafer diameter, the larger the material area that needs to be controlled and inspected. Companies need to master the density, type, and distribution of defects and evaluate which areas can be used for subsequent chip manufacturing.
Epitaxial layer quality also affects device performance. After the SiC substrate is processed, an epitaxial layer usually needs to be grown before entering the subsequent device manufacturing process. The thickness, doping concentration, and uniformity of the epitaxial layer all affect the electrical characteristics of the device. If the material parameters vary significantly across different regions of the wafer, the consistency of device manufacturing and the final yield may also be impacted.
Besides crystal growth and defect control, subsequent wafer processing also needs to adapt to size changes. After the single-crystal ingot is formed, it must undergo processes such as orientation, slicing, grinding, and polishing to produce substrates for chip manufacturing. Due to the high hardness of SiC, material loss, surface damage, and processing precision must be controlled during processing. As the wafer expands, indicators such as thickness, flatness, warp, and surface roughness must meet corresponding requirements; otherwise, subsequent epitaxial growth and device manufacturing may be affected.
At the same time, new production lines must also go through stages such as equipment debugging, process optimization, and customer qualification. If the capacity utilization rate is low, fixed manufacturing costs such as factory and equipment depreciation must be allocated to fewer qualified chips, causing the unit chip cost to rise accordingly. Therefore, when advancing 200mm manufacturing, manufacturers need to consider wafer quality, production yield, production line utilization, and customer demand simultaneously. Simply expanding the wafer diameter is not enough to bring the expected economic benefits.
04. How Domestic SiC Substrate Companies Can Enter the Global Supply Chain
The transition of SiC wafers to 200mm brings new opportunities for domestic substrate suppliers. Opportunities for domestic companies stem from the multi-source substrate procurement strategies of device manufacturers like Infineon, as well as the new qualification windows brought by the global 200mm manufacturing transition.
For overseas power semiconductor manufacturers, advancing large-size wafer manufacturing requires the capability to continuously supply high-quality substrates of corresponding specifications. After years of technical accumulation, domestic companies have established scaled production capabilities in the 6-inch (150mm) SiC substrate field and are steadily advancing the R&D, mass production, and customer introduction of 8-inch (200mm) SiC substrates.
SICC is a highly representative company among domestic SiC substrate enterprises.
According to relevant research data, in 2025, SICC's market share in the global conductive SiC substrate market reached 27.6%, ranking first globally. In the global 200mm conductive SiC substrate market, its share reached 51.3%.
From the perspective of product structure, 200mm SiC substrates have become a crucial component driving the company's business growth and have generated actual revenue contributions. The company's Q3 report released on October 21, 2026, showed that revenue from 200mm SiC substrates accounted for over 50% in the quarter, with operating revenue for the first three quarters reaching CNY 1.559 billion, a year-over-year increase of 40.22%.
The cooperation between SICC and Infineon also provides a specific case of domestic substrate companies participating in the international power semiconductor supply chain.
In May 2023, the two parties signed a SiC wafer and ingot supply agreement. The first phase focused primarily on 150mm material supply while also involving assistance for Infineon's transition to 200mm SiC wafers. On September 30, 2026, SICC won the Outstanding Supplier Award at Infineon's Global Supplier Conference. SICC stated that the award was related to its product quality, stable delivery, and technical response capabilities. Winning the award and the supply relationship indicate that SICC has entered Infineon's supplier system, but it does not mean it participated in this specific agreement between Infineon and Wolfspeed.
TanKeBlue Semiconductor is also advancing its 200mm SiC substrate layout.
Its products include conductive substrates of various sizes, as well as 150mm and 200mm conductive epitaxial wafers. In 2023, the TanKeBlue Semiconductor R&D team published research on the preparation and characterization of 200mm conductive 4H-SiC single-crystal substrates, introducing the preparation of single crystals with a diameter reaching 209mm through the physical vapor transport method and diameter expansion technology, which were then cut, ground, and polished into standard 200mm substrates.
In terms of industrialization, TanKeBlue Semiconductor launched the second phase of its Beijing SiC substrate industrialization base project in 2024, planning to build a production line for the mass production of 200mm SiC substrates. In 2026, the company continued to advance the construction of the second-phase project. The mass production scale, customer qualification progress, and batch delivery status of its 200mm products have not yet seen public revenue disclosures at the same level as SICC.
For domestic substrate companies, entering the supply chain of overseas power device manufacturers requires meeting multiple requirements. First is wafer quality, including indicators such as crystal defects, micropipe density, resistivity uniformity, thickness, and surface condition. Substrate quality affects subsequent epitaxial growth and device manufacturing, especially for high-voltage power devices, which have high requirements for material defects and consistency. After the wafer reaches the corresponding diameter specification, companies also need to ensure that the quality of the entire wafer meets customer requirements.
Second is batch consistency and continuous delivery capability. When introducing new substrate suppliers, overseas device manufacturers typically need to characterize the materials, followed by epitaxial growth, device manufacturing, and reliability validation to confirm compatibility with existing processes. A single sample meeting the indicators only shows that the product has the foundation for further validation. Suppliers also need to maintain stable quality performance across different production batches, ensure delivery continuity, and promptly respond to customer needs regarding materials and processes.
Customer qualification is also a crucial step in expanding international business. SiC substrates enter the customer's existing manufacturing process. New suppliers must undergo corresponding quality assessments and process validations to confirm whether material changes affect epitaxial quality, device performance, and production yield. For international power semiconductor manufacturers with established mature supply systems, whether suppliers can continuously meet technical requirements and deliver products stably will affect subsequent procurement and cooperation arrangements. Moving from sample validation to long-term supply usually requires continuous testing and production assessments.
05. Conclusion
Infineon's expansion and extension of the 200mm SiC wafer supply agreement with Wolfspeed reflects the trend of the SiC industry upgrading to 200mm wafers. For device manufacturers, larger-sized wafers and multi-source procurement help advance manufacturing transformation. For material suppliers, entering the long-term supply systems of leading manufacturers provides new opportunities for business development. However, whether 200mm can truly bring cost advantages depends on whether manufacturing yield, capacity utilization, and actual orders can keep pace. The revenue contribution from Wolfspeed's this partnership also awaits subsequent verification.
For domestic SiC substrate companies, the global push for 200mm manufacturing opens up new market space, but whether they can seize the opportunity ultimately depends on product quality, batch consistency, cost control, and stable delivery capabilities. As large-sized wafers are gradually introduced, competition in the SiC industry will further deepen into the materials and manufacturing segments. Whoever can translate technological progress into stable mass production capabilities will have a better chance of securing long-term orders in the global power semiconductor supply chain.