Silicon Carbide Market Trends

Growth Drivers

• Regulatory risk assessment and compliance with chemical safety: The existing overhaul of the chemical risk evaluation in the Toxic Substances Control Act (TSCA) of the U.S. is influencing the market. In 2024, the EPA revised TSCA processes to include elaborate risk evaluations on each use condition, exposure pathway, and lifecycle phase of the existing chemicals, making compliance complicated among manufacturers. The fees paid by the silicon carbide manufacturers in order to comply are going to intensify significantly, whereas the pre-manufacture notices (PMNs) fees have also escalated to USD 37,000 compared to USD 19,020, and the risk assessment fees can go up to USD 4.287 million per substance. These laws compel demand for safer and purer SiC products and upgrades to the processes, which strengthen the growth of markets in the chemical industry.
• Integration of electric vehicle (EV) & renewable energy system: The electrification and adoption of renewable energy is a strong demand driver of silicon carbide. In EVs and renewable systems, SiC power devices are increasing inverter efficiency significantly to lower energy loss, and are needed to meet EU eco-design and U.S. Department of Energy efficiency targets. According to the U.S. Department of Energy, Alternative Fuels Data Center, the electric vehicle (EV) charging systems are growing at a high rate. During the second quarter of 2024, the count of EV charging ports grew by 6.3% and the DC fast charging ports grew by 7.4%. The Northeast area has recorded a significant growth in the number of public charging ports by 13.2%. These efficiency-based regulatory standards form an effective B2B demand pipeline, propelling the production of SiC and expansion of the international market.
• Innovation in the Production efficiency and purity of the material: The technological breakthroughs in the production of SiC refine the production efficiency and purity of the material. Better energy use has also been achieved through the adoption of better plasma-based synthesis and catalytic processes, which resulted in 20% less energy usage per ton of SiC synthesized. Moreover, a thermal treatment process with 2000-2600°C in an inert atmosphere recovers up to 80% reusable silicon carbide in the form of powder material in waste, improving the supply of silicon carbide with an increasing demand. These inventions conform to the sustainability requirements set by agencies like the EPA and DOE that enable manufacturers to comply with the tightened emissions and waste standards, as well as control production costs. Consequently, the increased efficiency of the SiC manufacturing, and thus, environmental compliance, as well as scalable market expansion in high-need markets such as power electronics and renewable energy.

Challenges

• High environmental compliance costs: Silicon carbide production entails energy-consuming processes that generate greenhouse gases and particulate matter, for which environmental compliance is a significant issue. In the U.S., the manufacturers are obliged to comply with the laws of the Clean Air Act and the Clean Water Act, which require the installation of pollution control devices, continuous monitoring, and reporting of emissions. In the case of small and medium-sized enterprises (SMEs), the cost of covering these environmental conditions is prohibitive, and thus, the production capacity and entry into the market may be restricted. Such compliance costs affect the pricing models and retard the adoption of SiC-based products in the near term, especially in the areas where stricter standards are imposed, and encourage bigger players to invest in the cleaner and more effective production technologies to stay competitive.
• Trade barriers and tariffs: The distribution of silicon carbide products to the market throughout the world is limited by trade barriers and tariffs that raise the prices of raw materials and influence access to markets. For example, the U.S. has imposed anti-dumping levies on the SiC imports of some countries in order to support the local manufacturers. These policies increase the price of imported SiC raw materials and components, compel suppliers to revise pricing models, and may constrain supply chain flexibility. Smaller producers can hardly bear these expenses, and large ones have to deal with complicated compliance and reporting. These trade barriers affect market penetration in the world, as the time taken to introduce the product is long, and the competitiveness is diminished in the major regions.