"Just two years ago, a mainstream 6-inch SiC wafer from global leader 
Wolfspeed was $1,500, but Chinese suppliers' offerings now can be as low as $500 a piece or lower.”
SiC substrates are a critical material for making high-voltage power semiconductors used in aerospace, EVs, turbines and data center infrastructure.
That rapid rise is a result of China ramping up efforts to build a domestic supply chain in areas not yet targeted by US export curbs 
compound semiconductors like SiC and less advanced but still vital chips used in a range of applications.
Guangzhou Summit Crystal Semiconductor sells 6-inch SiC substrates for as low as $500, while TankeBlue, a key supplier to Infineon Technologies, offers them at around $800 apiece. And these are just two of the dozens of little-known Chinese companies now competing in this segment.
SiC wafers are a prime example of how China leverages state-backed subsidies to rapidly capture market share and challenge industry leaders in critical electronic components.
Since most production equipment for these semiconductors falls outside the scope of US export controls, China has been able to make rapid advancements, with at least 688B yuan ($95B) in national chip funding commitments since 2014.
"It's a bloody price war for SiC now. China not only has more than enough SiCs, but it also created a complete homegrown ecosystem for equipment and materials. They don't need the likes of Applied Materials to help them build compound semiconductors."
Another imminent concern for the industry is China's expansion in "mature" semiconductor nodes — typically 28nm and older technologies — used in everything from phones and home appliances to cars and defense equipment.
China's mature chip capacity will account for about 28% of the global market by 2025, and that figure could grow to 39% by 2027.
SMIC is emblematic of China's growing competitiveness in mature chips.
SMIC is now the world's third-largest contract chipmaker by revenue after TSMC and Samsung Electronics, and its market capitalization has surpassed those of several European, US and Taiwanese rivals. Its annual capital expenditures have soared to over $7B in the past two years, compared with about $1.8B in 2018, and it has built additional plants in Shanghai, Beijing and Shenzhen.
SMIC has moved from the "verification" stage to the "volume production" phase for automotive-grade semiconductors, which require more durability than consumer electronics-grade chips.
"In terms of some mature chips for sensors, microcontrollers and display driver chips, SMIC has very competitive prices and service. In TSMC, all the best teams go to support cutting-edge chip customers, but at SMIC, you can get the best teams supporting your mature chip products."
"Now you can see that even some foreign chipmakers serving the Chinese market are turning to Chinese contract chipmakers for capacity because it's cheaper than doing it in-house."
But even SMIC is not immune from the industry's big worry: overcapacity.
Exacerbating the situation is the flood of Chinese electronics and auto companies rushing into the chipmaking game. Gree Electric Appliances, Guangzhou Automobile Group, China FAW Group, Oppo, Meituan and ZTE are all taking stakes in emerging domestic chipmakers backed by local governments, including those of Chongqing, Shanghai, Shenzhen, Guangzhou, Qingdao and Ningbo. These governments are strong backers of little-known chipmakers such as XLMEC, Shanghai Dingtai Jiangxin Technology, Runpeng Semiconductor Shenzhen and WY Semi, which are working on mature chips for connected devices, cars and other applications.
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asia.nikkei.com/Business/Techn
Wolfspeed was $1,500, but Chinese suppliers' offerings now can be as low as $500 a piece or lower.”
SiC substrates are a critical material for making high-voltage power semiconductors used in aerospace, EVs, turbines and data center infrastructure.
That rapid rise is a result of China ramping up efforts to build a domestic supply chain in areas not yet targeted by US export curbs compound semiconductors like SiC and less advanced but still vital chips used in a range of applications.
Guangzhou Summit Crystal Semiconductor sells 6-inch SiC substrates for as low as $500, while TankeBlue, a key supplier to Infineon Technologies, offers them at around $800 apiece. And these are just two of the dozens of little-known Chinese companies now competing in this segment.
SiC wafers are a prime example of how China leverages state-backed subsidies to rapidly capture market share and challenge industry leaders in critical electronic components.
Since most production equipment for these semiconductors falls outside the scope of US export controls, China has been able to make rapid advancements, with at least 688B yuan ($95B) in national chip funding commitments since 2014.
"It's a bloody price war for SiC now. China not only has more than enough SiCs, but it also created a complete homegrown ecosystem for equipment and materials. They don't need the likes of Applied Materials to help them build compound semiconductors."
Another imminent concern for the industry is China's expansion in "mature" semiconductor nodes — typically 28nm and older technologies — used in everything from phones and home appliances to cars and defense equipment.
China's mature chip capacity will account for about 28% of the global market by 2025, and that figure could grow to 39% by 2027.
SMIC is emblematic of China's growing competitiveness in mature chips.
SMIC is now the world's third-largest contract chipmaker by revenue after TSMC and Samsung Electronics, and its market capitalization has surpassed those of several European, US and Taiwanese rivals. Its annual capital expenditures have soared to over $7B in the past two years, compared with about $1.8B in 2018, and it has built additional plants in Shanghai, Beijing and Shenzhen.
SMIC has moved from the "verification" stage to the "volume production" phase for automotive-grade semiconductors, which require more durability than consumer electronics-grade chips.
"In terms of some mature chips for sensors, microcontrollers and display driver chips, SMIC has very competitive prices and service. In TSMC, all the best teams go to support cutting-edge chip customers, but at SMIC, you can get the best teams supporting your mature chip products."
"Now you can see that even some foreign chipmakers serving the Chinese market are turning to Chinese contract chipmakers for capacity because it's cheaper than doing it in-house."
But even SMIC is not immune from the industry's big worry: overcapacity.
Exacerbating the situation is the flood of Chinese electronics and auto companies rushing into the chipmaking game. Gree Electric Appliances, Guangzhou Automobile Group, China FAW Group, Oppo, Meituan and ZTE are all taking stakes in emerging domestic chipmakers backed by local governments, including those of Chongqing, Shanghai, Shenzhen, Guangzhou, Qingdao and Ningbo. These governments are strong backers of little-known chipmakers such as XLMEC, Shanghai Dingtai Jiangxin Technology, Runpeng Semiconductor Shenzhen and WY Semi, which are working on mature chips for connected devices, cars and other applications.
1/n
asia.nikkei.com/Business/Techn