As demand for electric vehicles declines and preemptive compound semiconductor supply and investment overlap, the poor performance of SiC value chain companies is becoming noticeable. However, if the power semiconductor market for renewable energy and AI data centers is developed, it can become a cyclical market without a down cycle in demand, and the industry is expecting a point when visible performance increases will begin in earnest.

■ Renewable energy, undiminished even by Trump’s appearance
According to the 'Global Renewable Energy Market Trends and Implications' published by the KDB Future Strategy Institute, the global power generation facility new construction capacity is expected to reach an all-time high of 565 GW in 2023, while the annual new construction scale is expected to increase every year and reach 940 GW in 2030.

Despite the emergence of the second Trump administration and its positive tone toward deregulation of oil and chemical industries and increased production, the trend in the energy industry in the U.S. and around the world is toward a significant increase in new renewable energy facilities, centered on solar and wind power.

In particular, solar power generation capacity is increasing significantly in the Middle East, China, and the US regions of California, Arizona, and Texas. Solar power generation capacity in the Middle East is expected to reach 100 GW by 2030 from 23 GW in 2024.

According to the International Energy Agency's forecast, the share of renewable energy in global power generation is expected to increase to 46% by 2030, and 5,520 GW of new renewable energy facilities are expected to be installed between 2024 and 2030. This is 2.6 times the amount of new installations over the previous seven years.

Solar power is expected to account for 80% of new installations, with China expected to account for 60% of total new capacity.

Last year, market research firm TrendForce predicted that SiC/GaN-based semiconductors would revolutionize the upgrade of power supply units (PSUs) for data centers. It analyzed that data centers are accelerating PSU progress in response to the high data consumption crisis of AI. Infineon, On Semi, EPC, TI, and Navitas were listed as major AI server PSU suppliers.

Expanding renewable energy-based power is essential to achieving green energy in all industries, including global big tech, IT device manufacturers, the automobile industry, and AI data centers. Accordingly, an increase in demand for SiC compound semiconductors that can provide energy efficiency benefits in the renewable energy industry is expected.

■ Optimistic outlook, undervalued reality

Despite the hopeful market outlook, the stock market led to a sharp rise in AI-oriented semiconductor and big tech stocks such as Nvidia, Palantir, Tesla, Microsoft, Alphabet, Meta, Broadcom, and Qualcomm, perhaps due to the focus on AI semiconductors and AI big tech.

On the other hand, Onsemi fell 40% from its 52-week high to $51.25, TI fell 20% to $180, NXP fell 30% to $212, and ST fell by more than half to $21.74.

In particular, Wolfspeed, which ranked first in the global market share for SiC wafers, has fallen more than 80% from its 52-week high, and its stock price, which was approaching $140 per share at the end of 2021, is currently hovering around $5, showing that shareholders are feeling a sense of crisis about the company's survival.

TrendForce, in its 'Overview of the Progress of 33 Global SiC Manufacturers', evaluated that Wolfspeed, Rohm, Coherent, Sumitomo Metals, and Showa Denko have made progress in 8-inch (200mm) SiC wafers and epitaxy. However, the market share of 8-inch products is less than 2%, and it is predicted that the market share will increase to 20% by 2027, showing lower than expected market expansion.

In addition, China's aggressive expansion of compound power semiconductor capacity and the fact that it is a major consumer market, and that there are at least 16 companies investing in 8-inch wafers and epitaxy processes, are expected to pose a threat to leading companies due to excessive competition.

It is also reported that domestic SiC power semiconductor company SK Powertech is experiencing ups and downs due to the slump in the related market. Recently, we implemented voluntary retirement for employees and reduced fixed costs.

■ Wolfspeed, CEO resignation and increased losses amid 2% market, a series of bad news
Wolfspeed has aggressively expanded its SiC wafer fab due to the electrification boom, but is recording operating losses as SiC demand is not meeting expectations. In a previous TrendForce report, the 8-inch SiC product market was estimated at less than 2%, raising questions about market expansion.

Wolfspeed CEO Greg Lowe resigned in November, and with no new CEO to be named, Chairman Thomas Werner was appointed as Wolfspeed's interim CEO.

In its recent fiscal year Q2 2025 earnings announcement, Wolfspeed said that while its 8-inch Mohawk Valley fab is driving sales, idle cost losses due to lower overall utilization rates, including the closure of the 6-inch Durham fab through the second half of 2025, are holding back earnings improvement.

In response to a question about the timing of profitability improvement during the earnings call Q&A, Wolfspeed stated, “We expect to see a reduction in our cost burden as we optimize operations at our Mohawk Valley and Siler City fabs and achieve 70% utilization.”