SILICON CARBIDE Tesla announces that it will use 75 % fewer SiC transistors in its powertrains

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Tesla has announced a 75 % reduction in Silicon Carbide (SiC) use, sending shockwaves through the industry. But what impact does this news actually have on the silicon carbide industry and how seriously do analysts assess the situation? Find the answers in this article.

In an announcement that sent shockwaves through the financial markets, electric vehicle (EV) giant Tesla announced that it is developing a new powertrain for lower-cost EVs that will use 75 % fewer silicon carbide (SiC) MOSFETs.

Cutting SiC without compromising performance

The news was broken by powertrain engineering boss Colin Campbell, who revealed that Tesla had engineered a way to achieve this reduction in SiC use in its next-generation powertrain. Campbell said that it would be done “without compromising the performance or efficiency of the car,” adding that the new powertrains will use motors built without any rare earth metals. This announcement alone caused ON Semiconducor and STMicroelectronics shares to drop 2 % each, with Infineon and Wolfspeed shares dropping 3 % and 7 % respectively. While these shares recovered a few days later, MP Materials, a supplier of rare earth metal neodymium, saw its shares drop by 11 %.

“Tesla has announced that it will use 75 % less SiC, a disaster for the SiC industry. This is worrying on first analysis, suggesting a potentially drastic downward revision to SiC’s addressable market,” said analysts at financial services group ODDO, responding to the news. It’s worth noting that Tesla’s current inverter module, which dates back to 2017, contains 48 SiC MOSFETs. In contrast, newer modules from other automakers currently available on the market contain 12. In other words, 75 % fewer, “which is precisely the figure mentioned by Tesla. So, Tesla may well be using this update to align itself with the market’s most advanced standards, but probably not before 2024 or 2025,” clarified the analysts.

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Some analysts are skeptical

The day after the announcement, Aehr Test Systems, a worldwide provider of test systems for burn-in test equipment and logic, optical, and memory integrated circuits, released a lengthy statement saying that despite Tesla’s plans, it “does not expect a 75 % reduction in the total market for silicon carbide wafers,” adding that its analysts don’t believe that there will be any significant impact on the market.

Aehr said new chips used in lower-cost Tesla models will have double the amps per device and likely will be 50 % or larger in surface area. “Therefore, the number of wafers required will be less impacted.” Tesla has not released any details on when its next-gen powertrain technology will be available. Some analysts like Dylan Patel at SemiAnalysis have said it could be 2024, whereas others believe that lower-priced Tesla vehicles based on the new powertrain won’t reach volume production until 2025 or 2026.

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Moore’s Law for power electronics?

Patel added that the SiC industry “does not need to be concerned at all” by Tesla’s announcement, pointing out that STMicroelectronics’ roadmap shows a 60 % reduction in SiC from generation 1 to generation 4. “You can think of it as Moore’s law for power electronics… the silicon carbide is getting more and more efficient,” adding that the SiC companies “have been reducing the amount of total chip area required to drive these purposes.”
Another observer offered an equally optimistic take. “So, whilst the headline of ‘Tesla reducing SiC content by 75 %’ sounds ominous, I would propose that it’s more of a comment on how far the industry has come in recent years and how Tesla’s ability to do this means that SiC is here to stay, and even be dominant, in automotive drivetrains moving forward,” wrote Stephen Lambert, head of electrification at McLaren Applied on LinkedIn.

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