Global chip toolmakers lean on SiC's toughness to keep fabs running, even as the SiC chip market itself works through an oversupply cycle

Silicon Carbide has quietly become one of the most consequential materials in modern chipmaking — not just as the semiconductor inside next-generation power devices, but as the structural backbone of the equipment that makesevery chip, from advanced logic to legacy analog parts.

Two Markets, One Material

Industry watchers often conflate SiC's two distinct roles. The first is well known: SiC is a wide-bandgap semiconductor used to build power devices for electric vehicles, renewable energy inverters, and — increasingly — the power-management systems inside AI data centers. The second, less publicized role is SiC as an engineering material: dense, ultra-pure SiC ceramics form the wafer chucks, susceptors, edge rings, and heater components inside deposition, etch, and epitaxy chambers.

That second role is why SiC demand doesn't move in lockstep with the chip industry's ups and downs. Fabs need durable, contamination-free process-kit parts regardless of which device generation they're running — which is one reason equipment-grade SiC has kept expanding even as the device side of the business cools.

A Correction on the Device Side

A Yole Group report on power SiC front-end manufacturing describes the industry entering a correction cycle following an unprecedented investment wave between 2019 and 2024, which left significant overcapacity upstream after an automotive slowdown reduced demand. By 2025, utilization rates had fallen to roughly 50% for upstream crystal-growth processes and 70% for device production lines.

Yole's own analysts frame the moment as a necessary pause rather than a structural decline. Principal analyst Taguhi Yeghoyan described the SiC market as having entered a necessary correction phase after five years of massive investment that must be absorbed before new tools and technologies can drive the next expansion. The firm expects the downturn to persist until 2027–2028, after which renewed growth is projected to come from 8-inch production platforms and next-generation trench and superjunction MOSFETs, with device revenue reaching nearly $10 billion by 2030.

AI Data Centers Emerge as an Unexpected Growth Engine

Recent disclosures and earnings calls from Wolfspeed, Infineon Technologies, and STMicroelectronics point to AI data center demand for advanced power management emerging as a new growth engine, even as the EV market slows. The shift is prompting manufacturers to reposition their production lines. Wolfspeed, for instance, completed the shutdown of its 150mm wafer fab in Durham ahead of schedule and is shifting production focus entirely to its 200mm facility in Mohawk Valley.

Wafer Technology Keeps Advancing Despite the Slowdown

Even amid the correction, materials innovation hasn't stalled — if anything, competition over larger, higher-quality substrates has intensified:

• In March 2026, Tiancheng Semiconductor announced it had successfully developed a 14-inch silicon carbide single crystal using self-developed equipment, with an effective thickness of 30 mm, marking a step beyond the industry's prior 12-inch generation.
• Separately, Silai Semicon completed delivery of its third batch of mass-production laser lift-off systems compatible with 12-inch Sic Substrates, with its core R&D team drawn from the laser science discipline at Huazhong University of Science and Technology.
• Elsewhere, San'an announced that the 8-inch SiC chip production line at its Hunan Sanan Semiconductor base had officially come online.

Larger wafers matter because they let equipment makers process more chips per batch — directly reducing the per-unit cost of both the SiC devices themselves and the process-kit components ground from SiC boules.

Market Size: Diverging Forecasts, Same Direction

Estimates of the broader SiC market vary by methodology, but all point toward long-term growth once the current correction clears:

• One March 2026 forecast from MarkNtel Advisors projects the global silicon carbide market growing at a compound annual rate of around 27% between 2026 and 2032, expanding from roughly $3.01 billion in 2026 to approximately $12.70 billion by 2032.
• A separate industry report tracking specifically silicon carbide manufacturing equipment— the tools used to grow, cut, and polish Sic Material — projects that market expanding from roughly $3.2 billion in 2025 to $8 billion by 2032, an implied 14.8% annual growth rate.

Why the Equipment Side Matters More Than It Seems

The logical throughline across these developments is this: SiC's mechanical and thermal properties — hardness, high thermal conductivity, resistance to thermal shock, chemical inertness, and low particle generation — make it nearly irreplaceable inside the process chambers used to manufacture all semiconductors, not just SiC-based ones. Wafer chucks, susceptors, and edge rings built from SiC don't degrade, warp, or shed contaminating particles the way alternatives can, which is why fabs continue investing in these components even during a device-market downturn.

That distinction — SiC as equipment infrastructure versus SiC as the active chip material — helps explain an otherwise confusing picture: a "correction" on the device side, alongside continued substrate innovation, capacity build-out, and a pivot toward AI-driven demand. The equipment layer of the SiC value chain isn't waiting for the device cycle to turn; it's already adapting to serve whichever segment — EVs, renewables, or AI infrastructure — needs it next.

Sources:
Yole Group ("Power SiC 2025 — Front-End Manufacturing Equipment," via Semiconductor Today, Dec 2025/Jan 2026);
TrendForce News;
MarkNtel Advisors (March 2026);
LEDinside.