By Kate Yuan

(JW Insights) Oct 26 -- Chinese compound semiconductor supplier San’an Optoelectronics is making progress with its silicon carbide (SiC) factory starting mass production on a small scale and will supply its auto chip joint venture with tech giant ST Microelectronics once it is finished, Yicai Global reported on October 24.

The plant, which is located in the automobile hub of Chongqing in southwestern China, has begun to produce samples of eight-inch silicon carbide devices which are being tested by San’an and its clients, a company insider told Yicai.

Costing RMB7 billion ($958.2 million), the factory will supply SiC to the $3.2 billion car chip JV between San’an and ST Microelectronics that is under construction in Chongqing.

Parts made from SiC are resistant to high pressure, high temperatures and erosion and are in big demand in the new energy vehicle sector.

Founded in 2000, Xiamen-based Sanan Optoelectronics focuses on manufacturing LEDs, SiC, optical communications, RF, filters, GaN products, as well as epitaxial wafers and chips for compound semiconductors. It went listed on the Shanghai Stock Exchange in 2008.

San’an is trying to tap into the fast-growing auto chip market through the tie-up as its main business of light emitting diode chips is not doing well.

San'an holds a 51 percent stake in the JV and ST Microelectronics the rest, the two parties said in June. Manufacturing is expected to start in the fourth quarter of 2025 and full production in 2028.

The company’s indirect controlling shareholder Fujian San’an Group, which owns 29.3 percent equity, will inject between RMB50 million ($6.8 million) and RMB100 million in the next month to increase its stake and support the new endeavor, according to the Yicai Global report.