Silicon carbide (SiC) power semiconductors represent a "golden track" with enormous growth potential. In 2024, the global SiC power semiconductor market was valued at just USD 2.55 billion, but it is projected to surpass USD 13.5 billion by 2029. By 2035, just six years later, this market is expected to skyrocket to USD 115 billion, demonstrating a remarkably rapid growth trajectory. However, many people misunderstand the true value driver within the SiC supply chain. In this vast industrial chain, the segment that truly determines device performance limits, differentiates companies, and controls the core value is the silicon carbide epitaxy step.
Customized SiC epitaxy serves as the core functional area for SiC power devices, acting as the "safety dam" for the stable operation of high-voltage power equipment. It dictates the value of SiC power semiconductors. Currently, the value of the automotive-grade 1200V epitaxial layer already exceeds that of the substrate. For solid-state transformers requiring 3300V, the epitaxial layer's value is more than three times that of the substrate. As voltage levels increase, the proportion of epitaxy in the total chip cost will continue to rise significantly. Epitaxy is the true "high-value zone" of the entire supply chain.
Undoubtedly, whoever masters the leading advantage in SiC epitaxy will hold the future discourse power of the global SiC power semiconductor industry. Today, we will set aside obscure technical jargon and use plain language and intuitive, everyday analogies to help you deeply understand the core value, industry logic, and investment potential of SiC epitaxy.
SiC Epitaxy as a High-Rise Built on a Substrate Foundation: Thickness and Structural Complexity Define Value Ceiling
To understand SiC epitaxy, we must first clarify the basic logic of the SiC supply chain. If we compare the core component for efficient power conversion and control—the SiC power device—to a complete building, then the SiC substrate can be likened to the building's foundation, and the SiC epitaxial layer to the building's single or multi-story structure. The SiC substrate, as a single-crystal base, is a standard product. The substrate does not contain the customer's required device structure. It is the subsequent epitaxy step that truly determines device performance and creates core value.
Simply put, SiC epitaxy involves using a precise chemical vapor deposition process to grow customized, multi-layered SiC single-crystal structures on the SiC substrate. These structures have higher quality and more controllable electrical parameters, tailored to specific customer needs. The combination of the substrate wafer and the epitaxial structure forms the epitaxial wafer. The quality of the epitaxial layer must be significantly higher than that of the substrate. It must eliminate the numerous defects in the substrate or lock them in place to prevent them from entering the epitaxial layer. Without exception, all SiC power devices are fabricated within the epitaxial layer. After device fabrication is complete, the substrate is usually thinned or removed to minimize the resistance and thermal resistance it contributes.
For the final SiC power device, core performance metrics like voltage blocking capability, switching efficiency, and energy loss are all determined by the epitaxial layer. Its quality directly sets the upper limit of the device's achievable performance. Using the building analogy: if you build a low-rise residential house on a foundation, the value of the foundation and the building above might be roughly equal, each accounting for about 50%. This is similar to the current value ratio between the SiC substrate and the thin epitaxial layer in low-voltage devices. However, if you build a super-luxury skyscraper over 30 stories high on the same foundation, the value of the building above will significantly exceed the foundation's value. The substrate is the fixed-cost "foundation," while the epitaxial layer is the "floors" built upon it. The structural complexity and total thickness of the epitaxy represent the structure and total height of the floors. How thick and how high-quality you can make the epitaxial layer determines the value you can create on that "foundation."
Returning to SiC power device data: according to statistics, 1200V automotive devices require an epitaxial layer thickness of 10-13 μm. 1500V photovoltaic inverter devices need 13-15 μm. High-end 3300V industrial and grid devices require a thick epitaxial layer of 30-32 μm, and ultra-high-voltage devices above 10,000V need a total epitaxial thickness of approximately 100 μm. Currently, the value of the automotive-grade 1200V epitaxial layer already exceeds the substrate's value. For solid-state transformers at 3300V, the epitaxial layer's value is over three times that of the substrate. As voltage levels increase, the proportion of epitaxy in the total chip cost will rise sharply, making it the true "high-value zone." On a substrate of the same specification, the greater the total thickness and the more complex the structure of the grown epitaxial layer, the higher the corresponding commercial and industrial value.
Under the Trend of High-Voltage Industrialization, Thick Epitaxial Layers are the Key to Cost Reduction and Efficiency Improvement
After reading the above, you might have two questions: Why does a thicker epitaxial layer allow for higher voltage blocking? And what are the benefits of a device being able to handle higher voltage? Next, using basic high school physics combined with practical industry applications, we will explain this clearly.
1. Why Does a Thicker Epitaxial Layer Mean Higher Voltage Blocking Capability?
The core function of a SiC power device is to act as a "switch" and "isolator" in high-voltage circuits. To ensure the device can operate normally under thousands or even tens of thousands of volts without breaking down, a specialized "voltage-blocking layer" is needed: the SiC epitaxial layer. If we compare high-voltage electricity to a surging flood, the epitaxial layer is the dam holding back the flood. The thicker and stronger the dam, the higher the flood level it can withstand, and the less likely it is to fail. Similarly, the greater the thickness of the SiC epitaxial layer, the higher the voltage limit it can handle, making the device more stable and safer under high-voltage conditions.
There is a key difference from the house-building analogy. As mentioned earlier, the substrate is thinned or removed after device fabrication, and doing so actually improves device performance. Of course, the technical challenges of growing thick epitaxy go far beyond just "making it thick." It requires not only achieving the target thickness but also ensuring low crystal defects and high uniformity across the large thickness. Otherwise, it would be like a "shoddy dam" that, even if thick enough, would be punctured at a defect site. This is why advanced thick epitaxy technology remains a core barrier in the SiC supply chain. The core of competition in the epitaxy segment is maximizing yield to ensure all produced epitaxial wafers are qualified "dams," which is extremely difficult from an engineering standpoint. Due to the high precision required for defect control in epitaxial growth, "yield" directly determines a company's profitability. The industry often sees a phenomenon of "equipment is easy to obtain, but yield is hard to achieve," which builds a moat for leading companies. This extremely high technical barrier makes epitaxial foundry the most concentrated segment in the SiC supply chain. According to data from Zhishi Consulting, in 2024, the top five global SiC epitaxial foundry companies collectively held 93.4% of the market share—meaning "yield is the moat" is most evident in the epitaxy segment. The top three global market share leaders are China's EpiWorld (02726) at 31.6%, Japan's Resonac (4004.T) at 19.4%, and China's Hebei Puxing at 17.8%.
2. Why is Higher Voltage Better? Understanding Industry Demand from Basic Physics
Using only Ohm's law and basic principles of energy loss learned in high school, we can easily see the essence of pursuing higher voltage: P = V × I, where P is power (watts), V is voltage, and I is current. For the same power level, if voltage V increases, the required current I decreases. Furthermore, high school physics tells us that energy loss equals the square of the current multiplied by resistance: I² × R. This means energy loss is proportional to the square of the current. So, from basic physics, we reach an obvious conclusion: for a power system with the same power rating, the higher the voltage used, the lower the current needed. And the lower the current, the greater the reduction in energy loss.
For example, consider a 10,000-watt power system. Using 1000V, the current in the circuit is 10A, and the loss is 10² × R = 100R. If we increase the voltage to 10,000V, the current drops to 1A, and the loss becomes 1² × R = 1R. The loss is reduced to just 1% of the original level! This is the core value of high voltage: drastically reducing energy loss, significantly improving energy efficiency, reducing heat generation in lines and devices, extending equipment lifespan, shrinking device size, and most importantly, lowering production costs.
Consequently, many SiC industry applications are moving towards higher voltages. For example, new energy vehicles are upgrading from 400V platforms to 800V high-voltage platforms, and are now beginning to transition to 1000V platforms. SiC devices for solar and wind power grid integration have already moved from 400V to 1700V, and even 2000V. The core reason for promoting high-voltage solid-state transformers (SSTs) in AI data centers and power grids is also based on the need for high efficiency, energy savings, and cost reduction. Taking the high-voltage route is an inevitable development direction for many power applications. According to research from CICC, SiC power chips are core components for AI power supply systems and will be used extensively in the wave of computing center construction. Starting from 2026, demand for SiC power chips from AI data centers will increase rapidly, with the compound annual growth rate for the quantity of SiC chips per megawatt of computing power expected to exceed 80% from 2026 to 2030. Simultaneously, as chip voltage requirements continue to rise, the average value per SiC chip used in AI computing centers will also increase, driving the compound annual growth rate for the total value of SiC chips per megawatt to between 140% and 380%. With this simultaneous rise in both volume and price, the value share of SiC power semiconductors in the AI data center supply chain will continue to increase.
Looking further, the epitaxy step is the core determinant of the voltage blocking capability of SiC power chips. Therefore, it will become the most significant upstream beneficiary in the development of the AI data center industry. In summary, if the SiC substrate is the "standardized foundation," then SiC epitaxy is the "high-value building" constructed on top of it. It is both the core driver of industrial upgrading and the future high-value zone of the SiC power semiconductor track, with exceptionally strong long-term growth certainty and strategic industrial value.
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