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Power Electronics

Compound semiconductors are back. Several very important trends are pushing adoption of compound semiconductor devices in key industries. These include the emergence of fifth generation (5G) wireless networking protocols, autonomous driving and robotic cars, transport electrification and augmented and virtual reality (AR/VR). These applications are pushing the adoption of 3D sensing, improved power module efficiencies and higher frequency communications. The key devices behind all these new developments are made from compound semiconductors.The latest announcements from Cree and Infineon on SiC materials, SiC power devices and GaN radio frequency (RF) devices are just the tip of the iceberg.

Learn more about what we can understand from this news here and from Yole Développement's reports on these subjets, including RF GaN Market: Applications, Players, Technology, and Substrates 2018-2023 and Power SiC 2017: Materials, Devices, Modules, and Applications.

The biggest news in the SiC and GaN industry in the last two weeks must be Cree’s announcement about Wolfspeed on its investor day on 26 February, 2018. Initially, in 2015 Cree had said that it would spin out its SiC power and GaN RF business, which was branded Wolfspeed. In 2016, it tentatively agreed to sell Wolfspeed to Infineon for $850M, including the SiC wafer business as well as the SiC power and GaN RF businesses. However, this move was blocked by the Committee on Foreign Investment in the United States in 2017.

After the failure of the transaction, the company decided to “shift our focus back to growing the Wolfspeed business”. And now, on 26 February, Cree announced that it has pivoted and put more focus on Wolfspeed, which is now its most profitable, but smallest, business unit. The company forecasts that from $221M in revenue 2017, including Wolfspeed materials, SiC power devices and GaN RF devices, this business will become its largest unit in the next five years. To achieve that, Cree will continue to expand Wolfspeed, focusing most of its capital investments on it.

Yole Développement expects the RF power market to grow strongly in coming years, with increasing demand for telecom base station upgrades and small cell implementations – for more on these subjects, read Yole Développement’s reports on RF Power Market and Technologies 2017: GaN, GaAs and LDMOS, GaAs and LDMOSRF GaN Market: Applications, Players, Technology, and Substrates 2018-2023 and 5G’s Impact on the RF Front-End Industry.

main trends in telecom base stations 2015 2023 yole 2018

(Source: RF GaN Market: Applications, Players, Technology and Substrates 2018-2023, Yole Développement, January 2018)

Overall market revenue could increase 75% between 2016 and the end of 2022, posting a 9.8% compound annual growth rate (CAGR) during this period. This would be a change from US$1.5 billion in 2016 to more than US$2.5 billion in 2022. Today the market is standing at the threshold completing the 4G network, and then beginning the transition to 5G. There’s still a lot to be settled and established, but some things are for sure. The new radio network will require more devices and higher frequencies. The total RF GaN market size will be a factor of 3.4 larger by the end of 2023, posting a 22.9% CAGR from 2017-2023. Chip providers therefore have a tremendous opportunity.

rf gan device market breakdown by application 2018 yole

 

(Source: RF GaN Market: Applications, Players, Technology and Substrates 2018-2023, Yole Développement, January 2018)

Cree is not joking about investing to seize the potential for the GaN RF devices for 5G. On March 6th, Cree announced that it would acquire the assets of Infineon’s RF power business for approximately €345 million. The transaction includes:

  • The main facility in Morgan Hill, California, which includes packaging and test operations for LDMOS and GaN-on-SiC;
  • Well-established customer relationships with leading manufacturers of wireless infrastructure equipment, including field support personnel on site;
  • Approximately 260 employees in the US locations, Morgan Hill and Chandler, Arizona, as well as in Finland, Sweden, China and South Korea; and
  • A transition service agreement to ensure business continuity and a smooth transition under which Infineon will perform substantially all business operations for approximately the next 90 days.
  • Infineon will support the transaction with a long-term supply agreement for LDMOS wafers and related components out of its fab in Regensburg, Germany, and will also supply assembly and test services out of its facility in Melaka, Malaysia.

Through this transaction, Wolfspeed has won packaging expertise, moved down the supply chain and got access to long-established strategic relationships with the major wireless infrastructure equipment manufacturers, such as Ericsson and Nokia.

In addition to that, the power SiC market is also very important to both Cree and Infineon. In fact, it is so important that Infineon is retaining this activity and reinvesting heavily in production and R&D. Both companies have signed a long term agreement in order for Infineon to have access to 6’’ SiC wafers from Cree. This secures Infineon’s wafer supply and enables it to support the very strong demand for power SiC devices, both for photovoltaics (PV), transport electrification and other applications. Transport is especially significant as multiple car makers have launched or announced cars using SiC power devices including BYD, Tesla, Toyota and Renault. Yole Développement's latest Power SiC 2017: Materials, Devices, Modules, and Applications report forecasts a market worth $1.1B in 2020, a CAGR of 28% for the next five years for total SiC power device market. We expect rapid growth in the adoption of SiC devices in onboard chargers for electric vehicles (EVs), and inverters for PV. Cree and Infineon have a strong relationship at the material level but are competing head-to-head at the power device level.

The new agreements are very good for Cree, as its GaN RF activities are reinforced with Infineon power RF assets, and it gets a long term contract on SiC materials. Now we will see how Infineon and Cree behave in the market.

 

Author: 

HongLin Casual YOLE2015 WBDr. Hong Lin works at Yole Développement, the "More than Moore" market research and strategy consulting company, as a technology and market analyst since 2013. She is specialized in compound semiconductors and provides technical and economic analysis. Before joining Yole Développement, she worked as R&D engineer at Newstep Technologies. She was in charge of the development of cold cathodes by PECVD for visible and UV lamp applications based on nanotechnologies. She holds a Ph.D in Physics and Chemistry of materials.

 

Source:   Yole Développement

 

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