Power Semiconductor Blog

2023 State of the Power Semiconductor Market

Chronic Lack of Investment? Or Diamond in the Rough?


Stephen Russell

February 14, 2023

2023 State of the Power Semiconductor Market

In a couple of recent interviews Jochen Hanebeck, CEO of Infineon has discussed the state of the power semiconductor market. Hanebeck notes that although the overall semiconductor chip shortage will likely improve in the short-term, power semiconductors are a rather unique segment of the market. The accelerating demand from vehicle electrification and clean energy will still leave power semiconductors in a shortage. Secondly, he notes foundry investment for power has been chronically insufficient, with many manufacturers opting to use legacy lines for volume production rather than committing capital to build new dedicated facilities.

Are these concerns fair? At the start of this new year let’s discuss the current outlook.

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Market Consolidation

Hanebeck has mentioned Infineon are ready to spend several billion euros on acquisitions. Consolidation is a growing trend we have observed in the market over the last couple of years. Particularly in terms of wide bandgap semiconductor material supply, specifically silicon carbide (SiC). In November 2021 onsemi acquired GT Advanced Technologies, a SiC wafer provider for $415 million, ST Microelectronics acquired a 55% stake in Norstel in 2019 and even Infineon acquired Siltectra in 2018 for $141 million who specialize in a ‘cold-split’ technology to split SiC wafers. In terms of acquisitions of device manufacturers, in the last year alone we have seen Qorvo acquire UnitedSiC and Navitas acquire GeneSiC.

Another interesting point Hanebeck makes is he believes ‘total self-sufficiency’ is unattainable. Despite significant acquisitions we still see many wafer supply agreements in place. For example, Infineon recently signed a multi-year agreement with Coherent for SiC supply. ST Microelectronics wafer supply deal signed with Wolfspeed in 2021 is estimated to have $800 million in value.

Over the last decade Infineon acquired Cypress Semiconductor, a manufacturer of automotive PMIC devices for $10 billion in 2020 and International Rectifier for $3 billion in 2015. In 2016 Infineon also attempted to acquire Cree/Wolfspeed for $0.85 billion in a deal which was eventually blocked by the Committee on Foreign Investment in the Unisted States (CIFUS). Could we see another similar scale deal on the horizon?

2023 State of the Power Semiconductor Market

A Lack of Investment?

If anyone is ready to invest it is Infineon. In their 2022 annual report it was announced annual revenue rose from EUR 11 billion to EUR 14.2 bullion from FY2021 to FY2022 (a 29% increase). We have seen Infineon announce billions of investments over the last year alone such as $2 billion into a dedicated WBG manufacturing facility in Malaysia.

Although it isn’t just Infineon making these significant moves. Wolfspeed have recently completed construction of the ‘world’s largest’ 200 mm dedicated SiC fab. They are also building a SiC material facility with total investment to reach $5 billion.

Gallium Nitride (GaN) is a slightly different scenario. One of the selling points of this material is it can be grown as epitaxy on silicon wafers, so no GaN wafers are necessary. Many companies in this sector are currently fabless which provides a certain reliance on foundries but also a relatively low barrier to entry.

Few companies have in-house GaN fabrication capability worldwide with Infineon being one of them. To date Infineon have licensed GaN technology from Panasonic and this collaboration shows no sign of slowing with a 2021 announcement of joint development on 2nd generation technology.

TSMC is amongst the largest foundry providers for GaN technology globally. TSMC’s 2021 annual report states that 2nd generation GaN products were due to begin production in 2022 with 3rd generation technology scheduled to debut in 2025.


A recent article in the Wall Street Journal describes the power semiconductor market as a ‘diamond in the rough’ and ‘a part of the semiconductor business that can take a beating’, reporting Wolfspeed’s revenue surging 54% year over year with onsemi’s SiC revenue tripling since the beginning of the year. It seems certain that power semiconductors will be in high demand for some years to come likely bucking the overall semiconductor market trend.

In terms of level of investment, it comes down to a matter of opinion on what the correct amount should be. Perhaps chronically insufficient is a strong term, no doubt there is a high barrier to entry for dedicated SiC fabrication and the appeal of using legacy equipment makes sense. It does seem some companies are more than willing to take the plunge and make large investments, with the promise of growth in the power semiconductor market over the next decade just too strong. For those with the capital and a brave forward-looking outlook power semiconductors present a wonderful market opportunity.



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  • Infineon CEO notes lack of power semiconductor investment, but deems chip self-sufficiency unattainable (DigiTimes Asia) 2023
  • Chipmaker Infineon ready to spend billions on acquisitions – CEO (Reuters) 2022
  • onsemi Completes Acquisition of GT Advanced Technologies (onsemi Website) 2021
  • STMicroelectronics to Acquire Majority Stake in Silicon Carbide Wafer Manufacturer Norstel AB (ST Microelectronics Website) 2019
  • Infineon acquires Siltectra, a specialist for silicon carbide (Infineon Website) 2018
  • Qorvo® Acquires United Silicon Carbide (UnitedSiC), a Leading Provider of Silicon Carbide Power Semiconductors (Qorvo Website) 2021
  • Navitas Semiconductor, Industry-Leader in Gallium Nitride Power ICs, Announces Acquisition of GeneSiC Semiconductor, Silicon Carbide Pioneer (GeneSiC Website) 2022
  • II-VI Incorporated Signs Multi-Year Contract to Supply Infineon with Silicon Carbide Substrates for Power Electronics (Coherent Website) 2022
  • Cree | Wolfspeed and STMicroelectronics Expand Existing 150mm Silicon Carbide Wafer Supply Agreement (Wolfspeed Website) 2021
  • Infineon Technologies AG completes acquisition of Cypress Semiconductor Corporation (Infineon Website) 2020
  • Infineon Technologies AG successfully acquires International Rectifier (Infineon Website) 2015
  • Infineon to acquire Wolfspeed for US Dollar 850 million in cash (Infineon Website) 2016
  • Cree Announces termination of Wolfspeed and Infineon sale transaction (Wolfspeed Website) 2017
  • Infineon Annual Report 2022 (Infineon Website) 2022
  • Infineon doubles down on wide bandgap by investing more than €2 billion in a new Kulim, Malaysia frontend fab to expand market leadership in power semiconductors (Infineon Website) 2022
  • Wolfspeed Opens the World’s Largest 200mm Silicon Carbide Fab Enabling Highly Anticipated Device Production (Wolfspeed Website) 2022
  • Wolfspeed Selects North Carolina for World’s Largest Silicon Carbide Materials Facility (Wolfspeed Website) 2022
  • Infineon and Panasonic accelerate GaN technology development for 650 V GaN power devices (Infineon Website) 2021
  • TSMC Annual Report 2021 (TSMC Website) 2021
  • This Chip Sector Is a Diamond in the Rough (Wall Street Journal) 2022

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