On November 6, Denso announced a $500 million investment in Coherent's subsidiary SiC substrate manufacturer Silicon Carbide LLC, which will give Denso a 12.5% stake in the company. Denso's investment will ensure long-term stable sourcing of 6 - and 8-inch SiC substrates.
Regarding this investment, the market has long had relevant news. At the end of September this year, it was reported that a number of companies such as Denso and Mitsubishi Electric are interested in investing in Coherent's SiC business and have held discussions about acquiring a minority stake in Coherent's SiC business.
The spin-off of the SiC business can provide investors with more investment opportunities, and is also optimistic about the development prospects of SiC, Coherent announced on October 10 that it will establish a subsidiary to independently operate the SiC business to better meet the demand for SiC in downstream markets such as electric vehicles.
At the same time, Denso and Mitsubishi Electric have signed long-term supply agreements with Coherent. Under the agreement, Denso and Mitsubishi Electric each invested US $500 million to acquire non-controlling ownership of 12.5 per cent of Coherent's newly formed SiC subsidiary, with the remaining 75 per cent held by Coherent. Coherent will supply both Denso and Mitsubishi Electric with 6/8 "SiC substrates and epitaxial wafers.
From the market news to Denso's official announcement of capital injection to Silicon Carbide LLC, just over a month, is also due to Denso's confidence in the development potential of SiC, with a view to completing the layout of key production capacity in advance as soon as possible. In the current situation of short supply of SiC materials, Denso's strategic investment in SiC material suppliers can strive for more initiative and discourse power for itself.
At present, SiC power components have ushered in a golden development period in the wave of automotive electrification, and a large outbreak of market demand is already brewing.
According to TrendForce Consulting research shows that the global SiC power market size is about 1.61 billion US dollars in 2022, and can reach 5.33 billion US dollars in 2026, with a CAGR of 35%. As more and more automotive companies begin to introduce SiC technology into electric drive systems to improve vehicle range and optimize vehicle architecture, electric vehicles will become the core driving force driving the growth of SiC power components market.
