Currently, STMicroelectronics has initiated a supplementary price increase for devices including MCUs (Microcontroller Units), power MOSFETs, and silicon carbide (SiC) starting June 28, 2026. Closely following this, Infineon's second round of price hikes for the year officially took effect on July 1. Prior to this, the company had already raised prices for power switches and related products. Reportedly, high-end categories such as SiC modules, automotive-grade modules, and high-voltage modules have seen price increases exceeding 15%.
Just a year ago, the global SiC sector was still mired in its darkest hour: substrate prices halved over three years, industry leader Wolfspeed reluctantly entered bankruptcy protection, and even domestic players like SICC（Tianyue Advanced） and TanKeBlue could not escape the shadow of losses. On the device/module front, Infineon's revenue declined by 2% in 2025, while STMicroelectronics' revenue dropped by 11.1%.
From "bleeding across the board" to "collectively calling for price hikes," is SiC making a comeback?
The Brutal Substrate Price War
According to data from TanKeBlue's prospectus, the price of its 8-inch SiC substrates plummeted from 29,417 RMB per wafer in 2023 to 6,172 RMB per wafer in 2025, a staggering drop of 79%. Similarly, the price of 6-inch SiC substrates fell from 4,780 RMB per wafer in 2023 to 1,695 RMB per wafer in 2025, a decline of 64.5%.
Figure: Unit price and unit cost of TanKeBlue's SiC substrates from 2023 to 2025
Even more astonishingly, in 2025, the unit prices of both 8-inch and 6-inch SiC substrates from TanKeBlue fell below the production cost line.
SiC substrates form the foundation of the entire SiC industry chain, accounting for approximately 47% of the total device cost. When combined with the 23% from the epitaxy stage, upstream materials collectively consume 70% of the value across the entire industry chain. This means that any fluctuation in substrate prices will be amplified into an earthquake throughout the entire industry chain.
Around 2022, driven by fervent expectations for the boom in NEVs (New Energy Vehicles), global SiC companies embarked on an unprecedented capacity arms race. Wolfspeed made a massive bet on 8-inch wafers, investing billions of dollars in Mohawk Valley and Durham, New York State. Domestic companies such as SICC（Tianyue Advanced） and TanKeBlue also significantly expanded production with dual support from policies and capital. Meanwhile, IDM manufacturers like Sanan Optoelectronics and Silan Microelectronics extended their operations from the device end upstream.
The root cause of this price collapse lies in a staggering figure: in 2025, the global annual capacity for SiC substrates reached approximately 4 million wafers, while market demand during the same period was only about 2.5 million wafers. The overcapacity of 1.5 million wafers hung over the entire industry like a massive mountain.
More critically, a large portion of this capacity consisted of homogenized, low-end 6-inch products. The effective supply of high-end automotive-grade substrates and 8-inch products remained consistently insufficient. The industry fell into an absurd paradox: low-end capacity was so overbuilt that it triggered price wars, while high-end capacity was so tight that supply was extremely hard to secure.
Meanwhile, demand hit a wall.
The electrification progress in the European and American EV markets fell far short of expectations, and the Chinese auto market plunged into an unprecedented price war. Automakers frantically compressed BOM (Bill of Materials) costs to defend their sales bottom lines. As an upstream material, SiC bore the brunt of the impact.
Chinese Players "Overtaking"
However, the market void left by Wolfspeed is being filled at an astonishing speed by a group of Chinese players.
In March 2026, Fuji Keizai released an industry report: in the 2025 global conductive SiC substrate material market, SICC（Tianyue Advanced） surged to the top globally with a 27.6% share, closely followed by TanKeBlue with a 15% share. More importantly, for 8-inch products,SICC（Tianyue Advanced）'s global market share in this field reached as high as 51.3%.
The size iteration of SiC substrates is the core logic for cost reduction. Moving from 6-inch to 8-inch can increase the chip output per wafer by nearly 90% and reduce the cost per device by over 30%. Whoever achieves stable mass production of 8-inch wafers first will secure a ticket to the next era.
And this ticket was snatched first by Chinese players.
SICC（Tianyue Advanced） has achieved scaled mass production of 8-inch SiC substrates with a yield rate of approximately 70%, serving top-tier global clients including Bosch, Tesla, and Infineon. TanKeBlue, on the other hand, has built a scarce domestic "substrate + epitaxy" integrated delivery system. Its latest IPO plans to raise 2.78 billion RMB for capacity expansion, with the National Integrated Circuit Industry Investment Fund (Big Fund) and Huawei Hubble both on its shareholder list.
The breakthroughs are not limited to substrates.
Silan Microelectronics has cumulatively shipped over 100,000 automotive-grade SiC MOSFET modules. Its 6-inch production line has a monthly capacity of 10,000 wafers, and its 8-inch production line has been successfully commissioned. Xinlian Semiconductor's SiC MOSFET chips and modules comprehensively cover the 650V to 3300V process platforms, achieving approximately 50% year-over-year growth in 2025 and ranking among the top five global device suppliers. The 8-inch joint venture project between Sanan Optoelectronics and STMicroelectronics has entered the risk production stage.
This means that China's SiC industry is moving from a single-point breakthrough of "selling materials" to a full-chain competitiveness encompassing "substrate—epitaxy—device—module."
The Unexpected Second Growth Curve: AI
The rise of Chinese players represents a reshaping of the supply side of the SiC industry. Meanwhile, the explosion in AI (Artificial Intelligence) demand is a crucial marginal variable for stabilizing demand in the SiC sector.
The explosion of AI large models is pushing data centers to the limits of power supply.
In 2025, the 800V high-voltage direct current (HVDC) power supply architecture reached an industry consensus in the AI data center field. This architecture shifts the traditional AC power supply system of data centers to a DC high-voltage busbar power supply, significantly reducing conversion stages and lowering losses. The core power devices supporting this architecture can only be SiC.
The advantages of SiC are amplified to the extreme here. Its high-voltage withstand capability is 10 times that of silicon, switching losses are reduced by over 70%, and under the 800V HVDC architecture, it can achieve a conversion efficiency of over 95% for the 220V to 48V stage.
At the end of 2025, Google completed the validation of Delta's solid-state transformer (SST) products. In 2026, it swiftly placed an order for approximately 200 units, with a target to exceed 1GW in data center applications over the next three years. Leveraging its first-mover advantage, Delta has already shipped SSTs to Google in small batches, and its 800V HVDC systems will officially enter mass production in the second half of 2026.
Following closely are Sifang Co., Ltd., Weiguang New Energy, Jinpan Technology, Sungrow, and Huawei. Behind every solid-state transformer are dozens of high-voltage SiC power devices.
A research report by JPMorgan Chase points out that in the downstream applications of SiC devices, the contribution from data centers could rise from the current low single digits to the mid-to-high single digits within two to three years. AI will become a key driving force for the SiC industry.
The SiC industry, which was once highly dependent on the single-pole drive of NEVs, is transforming into a landscape jointly supported by NEVs, AI data centers, and solar, energy storage, and charging applications.
Is SiC Really Recovering?
First, let's look at the upstream SiC substrate materials.
SiC substrates need to be viewed in tiers according to application levels: automotive-grade and non-automotive-grade. There are significant differences in technical barriers, quality control, and overall supply difficulty between the two.
According to the disclosure in SICC（Tianyue Advanced）'s investor relations activity report on May 27, the automotive-grade market has always maintained a very healthy supply-demand balance. The technical barriers for automotive-grade substrates are extremely high, consistently maintaining a supply-demand balance. The automotive sector has stringent requirements for semiconductor devices, including zero defects, high reliability, and high temperature and voltage resistance. Therefore, the overall supply difficulty of automotive-grade SiC substrates is immense, requiring not only the control of extremely low defect densities in upstream crystal growth but also passing the rigorous certifications of leading downstream power semiconductor manufacturers and OEMs. Currently, the number of suppliers globally that can truly achieve stable mass production and scaled delivery of automotive-grade substrates, especially high-end large-size (such as 8-inch) products, is relatively small.
The supply-demand structure in the non-automotive-grade industry is gradually clearing out. Non-automotive-grade SiC substrates applied in fields such as photovoltaics, energy storage, industrial, and consumer electronics have slightly lower barriers compared to automotive-grade ones. Currently, inefficient capacity lacking core technologies, economies of scale, and quality advantages is being acceleratedly eliminated, and market share is rapidly concentrating towards leading enterprises with technological generational gaps and cost control capabilities. With the substantial improvement in supply-demand relations and the digestion of channel inventory, the prices of non-automotive-grade substrates have generally stabilized, and the industry is returning to a healthy and rational new normal.
Therefore, according to SICC（Tianyue Advanced）, as of the end of May, the prices of upstream SiC substrates have not shown a significant upward trend.
However, a research report by Guosheng Securities on June 26 pointed out that on the supply side of SiC substrates, small and medium-sized capacity continues to clear out, with effective supply concentrating towards leading players. The capacity utilization rate of leading substrate manufacturers has now exceeded 90%, and the supply of some high-end specification products is relatively tight. On the demand side, demand in traditional tracks is growing steadily. Coupled with the volume increase in emerging scenarios and end-user inventory stocking demand, the visibility of industry orders has significantly improved, and the delivery cycles for some products have been substantially extended. Guosheng Securities believes the industry has entered a prosperous upward stage of rising prices and increasing volumes.
As for downstream SiC devices and modules.
A senior industry practitioner revealed to reporters: Since the beginning of this year, the prices of power devices such as SiC, IGBTs, and silicon-based MOSFETs have seen significant increases. The core logic lies in the "crowding-out effect of back-end packaging capacity."
Although SiC and silicon-based devices belong to different production lines in the front-end wafer manufacturing stage, they highly share the same packaging and testing resources and foundries in the back-end packaging and testing stage. As SiC demand surges in the NEV and AI data center fields in 2026, major packaging and testing firms are tilting a large amount of capacity towards higher value-added automotive-grade SiC modules.
This "siphon effect" of capacity has led to the severe crowding out of packaging capacity for traditional silicon-based IGBTs and MOSFETs. Against the backdrop of steady demand in downstream new energy, industrial control, and other fields, the contraction of supply on the packaging end has directly driven the better-than-expected price increase of silicon-based power devices.
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