STMicroelectronics, a prominent European semiconductor powerhouse, has embarked on an exciting venture by signing a groundbreaking agreement with Sanan Optoelectronics. This strategic partnership aims to construct a state-of-the-art 200 mm silicon carbide (SiC) manufacturing joint venture in the bustling city of Chongqing, China.
The announcement comes hot on the heels of another significant achievement for STMicroelectronics. Just a few days ago, the company finalized an agreement with GlobalFoundries to establish a brand-new 300 mm semiconductor manufacturing plant specializing in fully depleted silicon on insulator (FD SOI) technology. This cutting-edge facility will be situated in Crolles, France, adjacent to STMicroelectronics’ existing site, further strengthening their manufacturing capabilities.
Sanan Optoelectronics, renowned for their advancements in SiC, optical communications, radio frequency (RF), and gallium arsenide (GaN) semiconductors, will concurrently construct and operate a separate 200 mm SiC substrate manufacturing facility to support the joint venture’s requirements. Leveraging their proprietary SiC substrate process, Sanan will play a crucial role in the project. STMicroelectronics anticipates production to commence by late 2025, with the full buildout scheduled for completion in 2028.
Under the terms of the agreement, the joint venture will exclusively produce SiC devices for STMicroelectronics, utilizing their proprietary SiC manufacturing process technology. Moreover, the venture will serve as a dedicated foundry to meet the increasing demand from Chinese customers, amplifying STMicroelectronics’ presence in the region.
To bring this ambitious project to fruition, the full investment for the 200 mm SiC joint venture fab is estimated to be around $3.2 billion. This includes approximately $2.4 billion in capital expenditures over the next five years. Funding for the venture will be sourced from STMicroelectronics, Sanan, the Chongqing government, and loans secured for this purpose.
The significance of this endeavor lies in the surging SiC market, which has gained remarkable momentum. As companies across the industry rapidly expand production capacities, they are also proactively securing long-term supply agreements with vendors in the automotive supply chain.
SiC devices have emerged as key components in electric vehicles (EVs) and EV charging stations due to their superior efficiency, faster charge times, and ability to enhance battery life when compared to traditional silicon semiconductors. With the automotive market undergoing a monumental transition toward electrification, SiC devices have become highly sought-after in the supply chain. To meet the anticipated surge in demand, companies are ramping up production and forging agreements with strategic partners.
Market research firm TrendForce predicts robust growth in the SiC power devices market, with a projected value of $2.28 billion this year, reflecting a remarkable 41.4% increase compared to the previous year. Looking ahead to 2026, TrendForce estimates the SiC semiconductor market to be worth approximately $5.33 billion.
Numerous industry players are banking on this growth trajectory. OnSemi, for instance, recently secured a 10-year SiC agreement with automotive electric equipment manufacturer Vitesco Technologies. OnSemi is also committed to expanding its SiC production capacity through a $2 billion investment in one of its fabs, following a separate supply deal with EV charger maker Kempower.