The semiconductor business has been experiencing a low wave tide, as chipmakers, memory vendors, are not experiencing boom in business lately, leading to excess inventories.
However, that is not to be said of the SiC (silicon carbide) semiconductors used in EV’s (Electric Vehicle’s); As business has been going so well, and demand for the chip is on the rise.
The Q2 (Second Quarter) report earning calls on Monday by financial analyst by a US based semiconductor company reported over $576-million in profits made, an increase by 26-percent in just one year, from over $2.09 billion in revenues.
Although sales in its entirety remained on the low during the quarter, it was estimated to be about $10-million from the previous year quarter. The company claimed that the Q2 revenue from SiC components increased four-times from the previous years.
In a little fun statement, made by the CEO Hassane El-Khoury on a call with Wallstreet:
“Our worldwide teams are firing on all cylinders, well, maybe I should start saying they’re spinning all motors now, In Q2 alone we signed more than $3-billion of new silicon carbide LTSA (Long Term Service Agreement).”
No doubt, that the bragging rights are earned, as El-Khoury stated that the automobile industry, has been one of the company’s largest customer bases, as it accounts for over 90-percent of Onsemi’s SiC sales as of recent.
Companies such as Vitesco, BorgWarner, and Magna have new customers in Q2, all of which are using the manufacturer’s SiC chips in products aimed at electric vehicle producers.
SiC (Silicon Carbide) chips have become a popular thing among auto-vehicle makers as they move from carbon emission auto, to the new age production of electric vehicles. The chip is more efficient at higher voltages common in electric vehicles. This makes it easier to find SiC in the traction inverters and the DC-to-DC (Direct-Current-to-Direct-Current) inverters used in Electric vehicles.
Chip production companies have the opinion that this greater efficiency also allows for lower weights, battery wear reduction, and longer range of electronic vehicles that uses the technology.
The chip which is not restricted to only automotive sector, has it parts found in a suitable use for power circuits that power circuits used in solar electricity systems, energy storage, motors, and power supplies.
“In a call to analyst, EI-Khoury told analysts that non-automotives markets only accounted for about 10-percent of Onsemi’s SiC sales.” –Theregister
A Competitive Market:
A futuristic prediction; Onsemi offered a cautiously profitable outlook for the semiconductor business, with a forecast between $2-billion to $2.19-billion in terms of generated revenue in the Q3, driven by high demand in large part of the automotive industry.
However, the market is competitive as Onsemi is not the only company in the lucrative market seeking to make a fortune in the modern electric car manufacturing business.
Market opportunities are mouthwatering, that investors are having no second thoughts in pumping billions of dollars into various company working on silicon carbide circuits.
Last Month Wolfspeed a North Carolina based company, that manufacture components using the SiC (Silicon Carbide), and Gallium Nitride (GaN), made a public post on their website of a $1.25 billion of a secured financing from an investment group led by Apollo, with a futuristic expectation of another $750-million dollar investment.
Wolfspeed’s industry-leading Silicon Carbide 200mm semiconductor wafer.
DURHAM, N.C., April. 25, 2022 – Wolfspeed, Inc. (NYSE: WOLF) -image
In the interval, opponent manufacturing chipmakers from both Germany and the Netherlands have also made announcement on their huge investment in the technology. Early this year around the month of April Bosch a German company, reveals its plans to acquire a Semiconductor manufacturing company by the name TSI, which is based in the California.
Bosch looks to 200mm SiC wafers with expansion – december-2021-eenewseurope
The deal which is said to allow the German business empire to invest a whooping some of $1.5 -billion in TSI’s Roseville, California to revamp the company, for the production of SiC components on 200mm wafers.
Other companies such as STMicroelectronics, which is responsible for producing parts for TESLA, is also expanding its SiC production, and bringing the chip production in house.
According to the CEO Jean-Marc Cherry during the companies second quarter earning call sometime last week, stated that he expects the silicon carbide circuits to have a huge turn-over in annual revenues to the tune of $5-billion by the end of the decade.
Please do let us know in the comment section what are your thoughts about this.