Japanese semiconductor giant: "It is very difficult to compete directly with Chinese companies!"

On July 24, the South Korean media "Chosun Ilbo" published an article stating, "The environment is undergoing a huge change. It is difficult to win against Chinese competitors directly."

The world-class Japanese automotive semiconductor company Renesas Electronics issued a strong reflection statement. Top-tier South Korean companies are also facing the same issue, which is "the impact from Chinese companies."

Renamed as "the leader of Japanese semiconductors" and "the last hope of Japanese semiconductors," CEO Hayato Shibata of Renesas Electronics recently stated that the company will delay its goal of increasing enterprise value six times by 2030, reaching 1 trillion yen, by five years, until 2035.

He said it is difficult to win in direct confrontation with Chinese companies, with the keywords being "China" and "silicon carbide."

Renesas ranks alongside Dutch NXP Semiconductor and German Infineon as the "Big Three" in the global automotive semiconductor market.

The company had originally focused on developing high-voltage silicon carbide (SiC) power semiconductors for electric vehicles as a future growth engine, but due to a sudden change in market conditions, business development has stalled. The company stated that the development of SiC has been stopped. In addition to SiC, the development of other compound semiconductors such as gallium nitride will continue.

A few years ago, Renesas Electronics had planned large-scale investments, expecting a surge in demand for these semiconductors, but the influence of China changed all market dynamics.

While Chinese electric vehicle companies dominate the global market, the emergence of Trump's second term, the end of EU and US electric vehicle subsidies, and the increase in China's self-produced wafer and chip output have all occurred simultaneously.

Renesas told Japan's Nikkei News: "SiC has become a 'red sea,' a highly competitive market."

Renesas' declaration of failure, like other high-tech industries, is a signal of distress in the current flow of "Chinese technological advancement → U.S. decline → Japan and the U.S. alliance while being hit simultaneously."

As Wolfspeed, the top SiC semiconductor wafer manufacturer in the United States, faces bankruptcy due to competition with Chinese companies, Renesas Electronics, which was preparing to launch new automotive semiconductor businesses based on Wolfspeed wafers, faced a chain reaction shock.

Wolfspeed is a young company founded in North Carolina in 1987, supplying wafers made of SiC, which can withstand higher temperatures and pressures than traditional silicon.

Wolfspeed was once the leading supplier, but in recent years, as Chinese companies became low-cost, high-volume suppliers of high-quality SiC wafers, Wolfspeed has faced difficulties.

Especially, they believed that the market demand was strong and made large-scale facility investments, but when the demand suddenly declined, their financial situation deteriorated.

Renesas Electronics signed a ten-year long-term supply contract for SiC wafers with Wolfspeed in 2023, paying 2 billion dollars in advance. If Wolfspeed goes bankrupt, Renesas will lose this large sum of money.

Original text: https://www.toutiao.com/article/1838534307753088/

Statement: This article represents the views of the author.