STMicroelectronics, Sanan Optoelectronics form silicon carbide device manufacturing JV in China

STMicroelectronics, a Switzerland-based provider of semiconductor solutions, and Sanan Optoelectronics, a manufacturer of compound semiconductors in China, have announced a collaborative agreement to establish a new joint venture (JV) focused on 200mm silicon carbide (SiC) device manufacturing.

The projected total investment for the full buildout of the JV amounts to approximately $3.2 billion, with an estimated $2.4 billion in capital expenditures to be allocated over the next five years.

The partnership aims to meet the increasing demand in China for car electrification, as well as industrial power and energy applications. The new silicon carbide fabrication facility is slated to commence production in the fourth quarter of 2025, with a full buildout anticipated by 2028.

Jean-Marc Chery — STMicroelectronics President and CEO said: “China is moving fast towards electrification in Automotive and Industrial and this is a market where ST is already well-established with many engaged customer programs. Creating a dedicated foundry with a key local partner is the most efficient way to serve the rising demand of our Chinese customers.

“The combination of Sanan Optoelectronics’ future 200mm substrate manufacturing facility with the front-end JV and ST’s existing back-end facility in Shenzhen, China will enable ST to offer our Chinese customers a fully vertically integrated SiC value chain.”

STMicroelectronics forms silicon carbide device manufacturing JV in China with Sanan Optoelectronics. Photo courtesy of STMicroelectronics.

As part of the agreement, Sanan Optoelectronics will independently construct and operate a separate 200mm silicon carbide substrate manufacturing facility to cater to the requirements of the JV, utilizing its own silicon carbide substrate process.

The JV, on the other hand, will exclusively produce silicon carbide devices for STMicroelectronics, utilizing the company’s proprietary silicon carbide manufacturing process technology. The JV will act as a dedicated foundry for STMicroelectronics, specifically catering to the needs of its Chinese customers.

The funding for the project will be sourced from contributions by STMicroelectronics and Sanan Optoelectronics, local government support, and loans provided to the JV. However, the completion of the project remains contingent upon regulatory approvals.

Simon Lin — Sanan Optoelectronics CEO said: “The establishment of this joint venture will be a major driving force for the wide adoption of SiC devices on the Chinese market.

“Being an international, well-known, high quality SiC foundry service company, Sanan will also supply its SiC substrate to this new joint venture, by building a dedicated new SiC substrate factory.

“This is an important step for Sanan Optoelectronics’ ambitions as a SiC foundry. With this new Joint Venture and the new SiC substrate capacity expansion, we are confident that we will continue to take the lead in the SiC foundry market.”

The establishment of this JV underscores the strategic collaboration between STMicroelectronics and Sanan Optoelectronics in addressing the burgeoning demand for silicon carbide devices in China. The partnership aligns with the country’s focus on car electrification and the broader industrial power and energy sectors.

Through this venture, both companies aim to leverage their respective expertise to contribute to the growth of the silicon carbide ecosystem in China, while delivering high-quality, cutting-edge solutions to meet the evolving market demands.