The Silicon Carbide Substrate Market: A Rollercoaster Ride with Long-Term Promise

The silicon carbide (SiC) substrate market has been anything but stable in recent years. Once hailed as the next big thing in power electronics, this high-performance semiconductor material has seen its fortunes swing wildly—most recently with a sharp 9% revenue drop in 2024. But before you write off SiC as another overhyped tech fad, hold on. Beneath the surface of this temporary slump lies a market poised for explosive growth, fueled by electric vehicles (EVs), industrial applications, and relentless technological innovation.
So, what’s really going on? Is this just another case of industry growing pains, or are deeper forces at play? Let’s break it down.
—

Market Downturn: A Perfect Storm of Soft Demand and Oversupply

The numbers don’t lie—2024 hasn’t been kind to SiC substrates. Global revenue for N-type SiC wafers fell to $1.04 billion, a 9% year-on-year decline. Analysts point to two main culprits: soft demand and oversupply.

1. The EV Slowdown Effect

SiC’s biggest cheerleader has long been the EV industry, where its superior efficiency and thermal performance make it ideal for power electronics. But EV sales growth has cooled slightly in some markets, leading to weaker-than-expected demand for SiC components.

2. A Price War Among Giants

Competition in the SiC substrate space is brutal. With major players like STMicroelectronics (32.6% market share) and onsemi (now second place after climbing from fourth in 2022) battling for dominance, prices have been slashed to stay competitive. Add in China’s aggressive domestic suppliers—TanKeBlue and SICC—and you’ve got a market flooded with supply but lacking enough buyers.

3. The Semiconductor Correction Hangover

This isn’t just an SiC problem. The broader semiconductor industry has been in a correction phase since 2023, with even advanced IC substrates taking a hit. But analysts predict a rebound starting this year, with a 9% CAGR expected from 2024 to 2029.
—

The Long Game: Why SiC Still Wins

Despite the current slump, SiC’s fundamentals remain rock-solid. Here’s why this market is far from dead.

1. EVs Aren’t Going Anywhere

Even with a temporary slowdown, the EV revolution is unstoppable. Governments worldwide are pushing for electrification, and automakers are doubling down on SiC-based inverters and chargers. By 2028, the SiC power device market is projected to hit $9 billion, with automotive applications leading the charge.

2. Bigger Wafers, Lower Costs

One of the biggest barriers to SiC adoption has been cost. But that’s changing fast. The industry is rapidly shifting to 8-inch wafers, which slash production costs and boost yields. Right now, 11 new 8-inch SiC fabs are under construction or planned globally, a clear sign that manufacturers are betting big on economies of scale.

3. Beyond Cars: Industrial and Energy Boom

While EVs grab headlines, SiC is quietly taking over industrial and energy applications. From solar inverters to high-voltage rail systems, its ability to handle extreme conditions makes it indispensable. The SiC-on-Insulator market alone is expected to grow from $99 million in 2024 to $149 million by 2029 (8.5% CAGR).
—

Who’s Winning (and Who’s Trying to Catch Up)?

The SiC substrate market is a classic case of “the rich get richer.” A handful of players control nearly 92% of total revenue, leaving little room for newcomers—unless they’re backed by deep pockets.

1. The Incumbents: STMicroelectronics & onsemi

STMicroelectronics remains the undisputed leader, while onsemi’s rapid rise shows how aggressive strategies (like locking in long-term supply deals with automakers) pay off.

2. China’s Homegrown Challengers

China isn’t content to rely on foreign suppliers. Companies like TanKeBlue (dominant in China’s power electronics market) and SICC (strong in other regions) are expanding fast, backed by government support.

3. The Wildcards: New Entrants & Vertical Integration

Some EV makers, like Tesla, are exploring in-house SiC production to cut costs. Meanwhile, startups are betting on niche applications, from aerospace to 5G infrastructure.
—

Conclusion: Short-Term Pain, Long-Term Gain

Yes, the SiC substrate market is in a rough patch. But this is a correction, not a collapse. The long-term drivers—EV adoption, industrial demand, and cost-reducing tech like 8-inch wafers—are stronger than ever.
By 2029, the overall SiC market could hit $17.2 billion, growing at a blistering 32.6% CAGR. The device market alone may surpass $10 billion.
So, if you’re an investor or a tech watcher, here’s the takeaway: Don’t panic over the 2024 dip. The real SiC boom is just getting started.