As demand for electric vehicles declines and preemptive compound semiconductor supply and investment converge, the performance of SiC value chain companies is becoming increasingly sluggish. 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 expects that this will be the point at which visible performance increases will begin in earnest.

Renewable energy remains undiminished even under Trump.
According to the 'Global Renewable Energy Market Trends and Implications' published by the KDB Future Strategy Research Institute, the global new power generation capacity is expected to reach an all-time high of 565 GW in 2023, and the annual new capacity is expected to increase every year, reaching 940 GW in 2030.

Despite the emergence of the Trump administration in its second term and its positive outlook for deregulation of petroleum and chemical industries and increased production, the energy industry in the United States and around the world is experiencing a significant increase in new renewable energy facilities, centered around solar and wind power.

Solar power generation capacity, in particular, is growing significantly, particularly in the Middle East, China, and the US states of California, Arizona, and Texas. Solar power generation capacity in the Middle East is projected to reach 100 GW by 2030, up from 23 GW in 2024.

According to the International Energy Agency (IEA), the share of renewable energy in global power generation is expected to rise to 46% by 2030, and 5,520 GW of new renewable energy capacity is 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 power supply unit (PSU) upgrades for data centers. The company analyzed that data centers are accelerating PSU development in response to the high data consumption crisis caused by AI. Key PSU suppliers for AI servers include Infineon, ON Semiconductor, EPC, TI, and Navitas.

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

■ Optimistic outlook, undervalued reality

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

Meanwhile, 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 had the largest global market share in the SiC wafer sector, 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, indicating that shareholders are concerned 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, but the market share of 8-inch products is less than 2%, and it is predicted that the market share will increase to the 20% range by 2027, showing lower-than-expected market expansion.

In addition, China's aggressive expansion of compound power semiconductor capacity and its major consumer market, coupled with the fact that at least 16 companies are investing in 8-inch wafers and epitaxy processes, suggest that excessive competition will also pose a threat to leading companies.

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

Wolfspeed faces a series of negative news, including CEO resignation and increased losses amid a 2% market decline.
Wolfspeed aggressively expanded its SiC wafer fab, fueled by the electrification boom. However, SiC demand has not met expectations, leading to operating losses. A previous TrendForce report estimated the 8-inch SiC product market at less than 2%, raising questions about market expansion.

Wolfspeed CEO Greg Lowe resigned in November, and with no new CEO currently in place, Chairman Thomas Werner was appointed as interim CEO of Wolfspeed, taking on the role of Chairman of the Board.

In its latest fiscal year Q2 2025 earnings announcement, Wolfspeed said its 8-inch Mohawk Valley fab is driving sales, but idle cost losses due to overall lower utilization rates, including the closure of the 6-inch Durham fab through the second half of 2025, are hindering profit 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.”