Editing by Greg Gao

As China’s booming EV industry exceeded the industry forecast, the supply shortage of high-end IGBT, a core IC component of EV, may plague Chinese EV automakers in the second half of 2022, JW Insights’ analyst indicated.

In 2021, the sales volume of EVs in China reached 3.521 million, a 1.6 times increase over the previous year. This has resulted in increasing demand for automobile semiconductor devices. Among them are IGBTs, an ideal motor inverter switch for 20KW to 120KW EV motors due to their high efficiency and fast switching, which are in short supply.

According to industry forecasts, the high-end IGBT shortage will continue until 2023.

Even leading Chinese EV manufacturer BYD, which produces its IGBT, has to seek external supply to meet surging demand.

There are few local companies in China with automotive IGBTs mass production capacity. International semiconductor companies such as Infineon and Mitsubishi Electric supply about 80% of China’s domestic market.

Although BYD's semiconductor market share ranks second in China, Wang Chuanfu, chairman of BYD, said “Our semiconductor products are mainly used for our automobile production, and barely meet our own needs.”

Dr. Wang Kai, director and CEO of SiEngine Technology, a Chinese automotive SoC provider, believes that the shortage of IGBT capacity is the main reason for the current issue. The upstream companies need at least half a year to prepare for the market fluctuation. Meanwhile, the booming EV market has not given the upstream industry chain enough time to react, resulting in a gap between supply and demand.

To meet the market demand, many IGBT companies are increasing their production capacity. Among them, the second production line’s capacity of SIAPM, a power module joint venture established by Infineon Technologies and SAIC Motor, is making progress and is expected to reach full capacity in June this year. By then Infineon’s IGBT module capacity in mainland China will reach 1.2 million.

However, in the view of an executive from SIAPM, the ramp-up of IGBT production is not as fast as the surging orders, and the expansion of production is not as smooth as planned, the shortage is expected to last to 2023.

This IGBTshortage is bringing more opportunities to China’s domestic companies. Since 2021, Times Electric(时代电气) has become a major supplier with the largest number of customers among local IGBT companies. Li Auto, Xpeng Motors, and other new car makers have installed IGBT modules from Times Electric in their cars. An industry insider said, "Time Electric's 750V IGBT modules are highly recognized by the market, and even used to replace Infineon's mid-range products."

Other companies, like Starpower Semiconductor (斯达半导体) became one of the main suppliers. Leapmotor and Silan Microelectronics(士兰微) have won a large order from BYD.

China’s IGBT players still lag significantly behind international manufacturers. In some application scenarios with extremely high stability requirements, OEMs are reluctant to replace high-end IGBT products from foreign established manufacturers with domestic products, said an industry observer.