On June 7, SANAN Optoelectronics, a leading compound semiconductor company in China, and STMicroelectronics, a world-class semiconductor company, jointly announced that: both parties have signed an agreement to jointly establish a new SiC device manufacturing plant in Chongqing, China. At the same time, SANAN Optoelectronics will set up an 8-inch SiC substrate sole proprietorship factory in the local area as a supporting facility.

According to information, the joint venture project company (tentatively named "SANAN STMicroelectronics (Chongqing) Co., Ltd.") will be controlled by SANAN Optoelectronics, with Hunan SANAN, a wholly owned subsidiary of SANAN Optoelectronics, holding 51% and STMicroelectronics (China) Investment Co., Ltd. holding 49% of the shares, respectively. The project, with an estimated total investment of 3.2 billion US dollars, will be constructed following the approval from the regulatory authorities. The project is expected to start production in the fourth quarter of 2025, and is expected to reach full capacity in 2028. The factory will utilize the patented SiC manufacturing technology from STMicroelectronics, and will be capable of producing 10,000 pcs of 8-inch SiC wafers per week upon reaching design capacity. The 8-inch SiC substrate sole proprietorship factory established by SANAN Optoelectronics in Chongqing plans to invest approximately 7 billion yuan, which will be established and operated separately by utilizing its own SiC substrate process to meet the substrate needs of the joint venture factory, which will sign a long-term supply agreement with the joint venture factory.

Lin Kechuang, General Manager of SANAN Optoelectronics, said: "The establishment of this joint venture factory will bring new strength to China's SiC market. We will make full use of our respective advantages and expand the supply of production capacity to vigorously promote the wide application of SiC devices in the market and boost the rapid development of the new energy automotive industry. This also marks the full recognition of SANAN Optoelectronics' SiC business by international customers, which is an important step towards our goal of becoming a professional international SiC wafer foundry. With the establishment of the new joint venture factory and substrate factory, we are confident that we will continue to occupy a dominant position in the SiC wafer foundry market. "

Jean-Marc Chery, President and CEO of STMicroelectronics, said: "China's automotive and industrial sectors are moving towards electrification at full speed. For STMicroelectronics, establishing a dedicated wafer factory with our key partner in China will help us meet the growing needs of Chinese customers in the most efficient way. By combining SANAN Optoelectronics' 8-inch substrate manufacturing plant under construction, the newly established front-end joint venture manufacturing plant of both parties and the existing back-end manufacturing plant of STMicroelectronics in Shenzhen, we will be able to provide Chinese customers with a fully vertically integrated SiC value chain. This is also an important step for us to further expand our global SiC manufacturing business in addition to our continued significant investments in Italy and Singapore. "

It is reported that the SiC market is very hot, and new energy vehicle is one of the main application markets of SiC and the main growth engine of the industry in recent years. SiC materials are resistant to high voltage resistance and high temperature, and SiC power devices have wide applications, which can improve the charging efficiency and driving performance of new energy vehicles, achieve longer driving range with the same power, and solve the double concern of "slow charging" and "short mileage". According to Yole data, the global market size for SiC power devices is expected to surge from 1.09 billion US dollars in 2021 to 6.297 billion US dollars in 2027, with a compound annual growth rate of 34%. The cooperation between the two SiC industry giants has attracted considerable attention from the industry and the market.