The Beijing Third Generation Semiconductor Industry Technology Innovation Strategic Alliance recently released the "2022 Third Generation Semiconductor Industry Development White Paper" (hereinafter referred to as the "White Paper"), which shows that overall, China‘s third generation semiconductor industry has entered a growth period, with steady technological improvement and continuous release of production capacity. Domestic silicon carbide (SiC) devices and modules have begun to "go online", the ecosystem is gradually improving, and the ability to independently control is constantly enhancing, The overall competitive strength is increasingly improving.
In 2022, the global semiconductor industry will end its continuous high growth and enter an adjustment cycle. In contrast, driven by demand for new energy vehicles, photovoltaics, and energy storage, the third-generation semiconductor industry has maintained rapid development.

According to the White Paper, the global market for silicon carbide (SiC) and gallium nitride (GaN) power semiconductors in 2022 is approximately 2.37 billion US dollars, and the GaN microwave RF market is approximately 1.24 billion US dollars. The listed company‘s product supply is in short supply, orders are fully saturated, and enterprises are accelerating production capacity expansion. The high growth and high gross profit of the third-generation semiconductor business have become performance highlights.

With leading enterprises actively entering through alliances, bundling, mergers and acquisitions, the third generation semiconductor global supply chain is forming, and the competitive landscape is gradually establishing, further stabilizing the advantages of first movers. Overall, the global third-generation semiconductor industry has entered a period of rapid growth.

The domestic third-generation semiconductor industry has undergone preliminary production capacity deployment and production line construction, and domestic third-generation semiconductor products have been successfully developed and validated, entering a period of industrial growth.

Data shows that in 2022, China‘s third-generation semiconductor power electronics and microwave radio frequency fields achieved a total output value of 14.17 billion yuan, an increase of 11.7% compared to 2021, and production capacity continues to be released. Among them, SiC production capacity has doubled, and GaN production capacity has increased by over 30%; The new investment and expansion plan increased by 36.7% year-on-year compared to 2021; The capital market is active, with a merger and acquisition amount exceeding 4.5 billion yuan, and 66 companies financing over 6.4 billion yuan.

Meanwhile, with the rapid growth of the electric vehicle market and the demand for photovoltaic and energy storage, the total size of China‘s third-generation semiconductor power electronics and microwave RF market reached 19.42 billion yuan in 2022, an increase of 34.5% compared to 2021. Among them, the power semiconductor market exceeded 10.55 billion yuan, and the microwave RF market was about 8.86 billion yuan.

The White Paper shows that compared to the relatively complex and uncertain internal and external environment, the high-speed development trend of third-generation semiconductors has always been clear. The downstream market, led by automotive products, will enter a period of rapid growth. Upstream wafers are still in short supply, and 8-inch technology will drive product performance and costs to gradually reach the sweet point of industrialization in the next few years. Products and technology will continue to improve, and the recognition of domestic materials and chips on the client side is expected to continue to increase. The penetration rate of SiC and GaN will be significantly increased.

The White Paper predicts that 2023 will be a brilliant year for the third generation of semiconductors, and the market will witness a "Warring States period" of "rapid technological progress, rapid industrial growth, and a major reshuffle of the pattern".

In the future, China‘s third-generation semiconductor enterprises will face fierce competition from both internal and external sources. "The White Paper believes that international semiconductor enterprises are rapidly expanding and striving to quickly seize the market. The global supply chain pattern is gradually taking shape, and the" niche war "of international leading enterprises is about to end. However, the technology and industrialization level of domestic enterprises are still lagging behind, the production line platform has just been established, and the core components have not yet entered the supply chain of leading enterprises such as automobiles and mobile phones, resulting in a low overall localization rate.

In order to change the above situation, the White Paper calls for domestic enterprises to double their efforts in technological innovation, talent cultivation, product reliability and capacity improvement, standard formulation, and application expansion, to jointly create a good industrial ecosystem and promote good and rapid development of the industry.