The global electric vehicle market share has seen a huge shift forward in the last decade and this trend is expected to accelerate exponentially in the future. It is the growth of electric vehicles that is driving the demand for next-generation power semiconductors, especially those made from silicon carbide. Here is a list of the companies that will benefit most from this trend in the coming years.

Silicon carbide semiconductors can operate at much higher voltages, temperatures and frequencies than traditional silicon-based semiconductors. This makes them a better choice for electric vehicles, solar power conversion, 5G wireless networks, aerospace and other applications. In addition, the largest initial market for silicon carbide (SiC) chips is electric vehicles. Silicon carbide chips provide faster charging and longer range for electric vehicles.

Investment bank Canaccord Genuity estimates that silicon carbide wafer capacity will grow from 125,000 6-inch wafers in 2021 to more than 4 million equivalent 6-inch wafers in 2030 to satisfy the electric vehicle market alone.

Silicon carbide chips are becoming essential

Cowen analyst Matthew Ramsay recently raised his estimates for the silicon carbide chip market, noting "significant supply-side and demand-side dynamics." He now expects silicon carbide device sales of $7.1 billion in 2026, up from his previous estimate of $5.4 billion. It also estimates that sales of silicon carbide chips will be $2.2 billion in 2022, up from $1.7 billion in 2021.

"Investor interest and focus on the nascent silicon carbide market continues to grow almost as fast as the TAM (total addressable market)," Ramsay said in a note to clients. "Silicon carbide has gone from esoteric to essential seemingly overnight."

Demand for SiC chips is likely to exceed supply by at least the second half of the decade, Ramsay said.

Leading silicon carbide producers

Leading silicon carbide chipmakers include Germany's Infineon, Japan's Rohm Semiconductor, Switzerland's STMicroelectronics $STM+1.6% , and US companies Wolfspeed $WOLF+4.9% and ON Semiconductor $ON+3.9%.

Meanwhile, major silicon carbide chipmakers are aggressively investing in new SiC wafer fabs and equipment. In April, Wolfspeed opened the world's largest semiconductor fab to produce silicon carbide chips from 200-millimeter wafers. The state-of-the-art, highly automated manufacturing facility is located in Marcy, N.Y. In addition, on September 9, Wolfspeed announced plans to build a factory in Chatham County, N.C., to produce 200-millimeter silicon carbide wafers.

Wolfspeed Inc is engaged in the manufacture of wide bandgap semiconductors. It focuses on silicon carbide and gallium nitride materials and devices for power and radio frequency (RF) applications. The company serves applications such as transportation, power supplies, inverters, and wireless systems. Geographically, it derives most of its revenue from Europe and also has presence in the United States; China; Japan; South Korea and other countries.

The other leading manufacturer of silicon carbide chips is Onsemi. It is a supplier of power semiconductors and sensors aimed at the automotive and industrial markets. Onsemi is the world's second largest manufacturer of power chips and the largest supplier of image sensors for the automotive market. While previously highly vertically integrated, the company is now pursuing a hybrid manufacturing strategy for flexible capacity. Onsemi is focusing on emerging applications such as electric vehicles, autonomous vehicles, industrial automation and renewable energy.

In August, Onsemi announced plans for a new silicon carbide materials plant in Hudson, NH. Additionally, on September 21, the company began expansion of its silicon carbide chip manufacturing plant in the Czech Republic.

DISCLAIMER: All information contained herein is for informational purposes only and is in no way an investment recommendation. Always do your own analysis.