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Chip shortage prompts EV makers to shore up SiC supply

  • Spanish Market: Metals
  • 06/05/21

Automotive manufacturers are engaging with silicon carbide (SiC) power device suppliers to secure deliveries as they look to avoid a supply crunch similar to the ongoing global semiconductor shortage.

Electric vehicles (EVs) use a growing number of power management devices, including metal oxide semiconductor field-effect transistors (Mosfets) and insulated gate bipolar transistors (IGBTs). IGBTs are used to switch the current in the drivetrain and Mosfets are used in the drivetrain, battery management system and voltage converters.

Manufacturers are increasingly shifting from using silicon to silicon carbide and in some cases gallium nitride (GaN) in these devices. Prices for SiC devices are higher than for silicon devices, but by operating at higher temperatures and frequencies, they make EV batteries more efficient and reduce overall system costs.

The cost savings are encouraging carmakers to incorporate SiC into new EV designs, according to Gregg Lowe, chief executive at US-based Cree, which produces SiC and GaN power devices. Automotive accounts for around half of the company's $10bn device pipeline, Lowe said.

The production constraints that have resulted from the semiconductor supply shortage have prompted carmakers and original equipment manufacturers (OEMs) to look at their supply chains for other components, including Mosfets and IGBTs.

"The attention the car manufacturers and the Tier 1s have to our supply chain is very high and very acute," Lowe said.

US-based ON Semiconductor similarly noted strong demand for SiC and IGBT products for EVs from Tier 1 and global EV OEMs, a few of which have recently launched new platforms and charging applications. The company is also observing a shift in the way carmakers approach the supply chain.

"The just-in-time era is not going to be sustainable," the company's president, chief executive and director, Hassane El-Khoury, said. "The short-term cancellation, all of that I think is going to be a thing of the past."

German semiconductor manufacturer Infineon Technologies expects its SiC business to double to €170mn in the current fiscal year ending in September, led by growth in automotive demand, having previous expected a 70pc increase.

Capacity expansions accelerate

Companies are increasing their production capacity expansions or bringing forward plant starts to meet the growing demand.

Cree, which launched four new SiC devices in March, is spending $550mn this financial year to expand its production of SIC materials and wafers by 30 times. The investment, part of a five-year $720mn capital expenditure budget, includes the construction of a wafer fabrication plant in New York state in the US, which is scheduled to start operations in 2022. Cree is also expanding capacity at its materials factory in North Carolina.

Cree expects SiC demand to accelerate in 2024 and beyond based on carmakers' production schedules. "We weren't predicting this. But the capacity coming on line and in a relatively short period is certainly a nice light at the end of the tunnel for some of these guys as they start placing bets on silicon carbide," Lowe said.

Infineon is starting to ramp up its manufacturing of silicon carbide products for vehicle inverters. It started installing equipment in a new manufacturing plant in Austria in March, Ploss said. The company is bringing forward the start of production at the plant to the last quarter of the fiscal year ending in September. And it is increasing investments in capacity, having revised them lower in 2019 when demand was weaker.


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07/11/24

US Fed cuts rate by quarter point: Update 2

US Fed cuts rate by quarter point: Update 2

Updates with recast outlook of results in paragraph 4 Houston, 7 November (Argus) — The US Federal Reserve cut its target interest rate by 25 basis points today, its second cut since 2020, as it said inflation has "made progress" towards its 2pc target. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.50-4.75pc from the prior range of 4.75-5pc. This followed a half-point cut made in mid-September, the first cut since 2020. The Fed has been cutting its target rate from two-decade highs as inflation, which peaked at 9.1pc in mid-2022, has come down to near the Fed's 2pc target. "The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks" in considering additional adjustments to the target rate, the FOMC said in its statement after the two-day meeting. "Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated," it said, adding that the unemployment rate "has moved up but remains low." The rate cut comes two days after Republican Donald Trump, a vocal critic of the Federal Reserve during his first term in office from 2017-2021, was elected president. With vote counting ongoing, the Republicans appeared poised to win both houses of Congress, giving Trump his best opportunity to enact his agenda since 2018. Fed chair Jerome Powell told reporters after the Fed's decision that he would not resign before his term ends in 2026 if asked to do so by Trump. He said the president did not have the power to fire or demote Fed chairmen. Trump, during his first term, nominated Powell to his position as Fed chair and he took office in February 2018, according to the Federal Reserve board's website. President Joe Biden reappointed him and he was sworn in in May 2022 for a second four-year term. Powell declined to discuss the incoming Trump administration's policies or "anything directly or indirectly" related to the election during the press conference. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Fed cuts rate by quarter point: Update


07/11/24
07/11/24

US Fed cuts rate by quarter point: Update

Updates with Powell's comments from press conference after meeting. Houston, 7 November (Argus) — The US Federal Reserve cut its target interest rate by 25 basis points today, its second cut since 2020, as it said inflation has "made progress" towards its 2pc target. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.50-4.75pc from the prior range of 4.75-5pc. This followed a half-point cut made in mid-September, the first cut since 2020. The Fed has been cutting its target rate from two-decade highs as inflation, which peaked at 9.1pc in mid-2022, has come down to near the Fed's 2pc target. "The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks" in considering additional adjustments to the target rate, the FOMC said in its statement after the two-day meeting. "Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated," it said, adding that the unemployment rate "has moved up but remains low." The rate cut comes two days after Republican Donald Trump, a vocal critic of the Federal Reserve during his first term in office from 2017-2021, was elected president. With vote counting ongoing, the Republicans appeared set to win both houses of Congress, giving Trump virtually unrestrained powers. Fed chair Jerome Powell told reporters after the Fed's decision that he would not resign before his term ends in 2026 if asked to do so by Trump. He said the president did not have the power to fire or demote Fed chairmen. Trump, during his first term, nominated Powell to his position as Fed chair and he took office in February 2018, according to the Federal Reserve board's website. President Joe Biden reappointed him and he was sworn in in May 2022 for a second four-year term. Powell declined to discuss the incoming Trump administration's policies or "anything directly or indirectly" related to the election during the press conference. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Fed cuts rate by quarter point, 2nd cut this year


07/11/24
07/11/24

US Fed cuts rate by quarter point, 2nd cut this year

Houston, 7 November (Argus) — The US Federal Reserve cut its target interest rate by 25 basis points today, its second cut since 2020, as it said inflation has "made progress" towards its 2pc target. The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.50-4.75pc from the prior range of 4.75-5pc. This followed a half-point cut made in mid-September, the first cut since 2020. The Fed has been cutting its target rate from two-decade highs as inflation, which peaked at 9.1pc in mid-2022, has come down to near the Fed's 2pc target. "The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks" in considering additional adjustments to the target rate, the FOMC said in its statement after the two-day meeting. "Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated," it said, adding that the unemployment rate "has moved up but remains low." The rate cut comes two days after Republican Donald Trump, a vocal critic of the Federal Reserve during his first term in office from 2017-2021, was elected president. With vote counting ongoing, the Republicans appeared set to win both houses of Congress, giving Trump virtually unrestrained powers. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US W mining essential after Trump victory: ITIA


07/11/24
07/11/24

US W mining essential after Trump victory: ITIA

London, 7 November (Argus) — The rise of protectionism and prospects of increasing tariffs between the US and China prompted discussions about the need to mine tungsten domestically in the US during the International Tungsten Industry Association (ITIA) conference in Barcelona this week. "The development of domestic tungsten production in North America is critical," a US tungsten consumer told Argus . The hard metal is gaining attention from the Department of Defence (DoD) owing to its applications within defence industries and potential future use in nuclear fusion. The lack of domestic tungsten is considered a significant risk to US national security. The US introduced a 25pc tariff on imported Chinese tungsten-related products effective from 1 August 2024. Furthermore, imports of tungsten-mined ore from China and Russia for DoD procurement will be banned from 2027. The DoD is providing an increasing number of grants for companies to establish domestic manufacturing. It is doing so through programmes such as the Defence Production Act Investments (DPAI), which, since the beginning of the fiscal year 2024, issued 55 awards totalling $555mn. "Many parties want us to move this project forward as quickly as we can," said Oliver Friesen, executive director of junior miner Guardian Metal, which is developing the largest tungsten deposit in the US, Nevada. "If we were to start production today, the tungsten concentrate from (our project) Pilot Mountain would represent the only primary domestic production in the US," Friesen said. Guardian Metal anticipates it can source 20pc of US tungsten consumption within three years. This funding initiative for domestic manufacturing has bipartisan support from both Republicans and Democrats, but it could accelerate with Donald Trump in the White House. The president-elect proposed tariffs of up to 20pc on all foreign goods and 60pc tariffs on all imports from China on the campaign trail. China accounts for more than 80pc of global tungsten production. One conference attendee told Argus he anticipates the tariffs to be a reality and not mere rhetoric. Any measures could provoke a retaliatory response from China, which has already imposed export controls on dual-use materials such as antimony, gallium and germanium. Despite this, some traders express scepticism about the need for the US to produce its tungsten, as consumers are sourcing material from "friendly jurisdictions" and political allies such as Portugal and Spain, and have plans to buy from South Korea. Additionally, the demand for virgin material may decrease, given the increasing viability of recycling, suggesting that less material may be necessary. However, amid regional shifts, one participant emphasised, "If the US becomes isolated, the material needs to be produced domestically." By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU minor metal markets await US reaction to Trump win


07/11/24
07/11/24

EU minor metal markets await US reaction to Trump win

London, 7 November (Argus) — Europe's minor metal markets have been slow to react to Donald Trump's re-election as US president, and any price movement in response is pending a reaction from US consumers and further details of Trump's tariff plans. The biggest point of interest for European market participants is the potential impact of Trump's tariff plans and whether they would apply to critical minerals. Trump in the past has said his administration would apply tariffs upwards of 60pc on all US imports from China and a 20pc tariff on imports from the rest of the world to protect American manufacturing. But this also runs the risk of driving up inflation. Minor metals trading firms are hopeful that exceptions will be made for critical minerals and that Trump's plans could be watered down and take some time to implement. "Knowing Trump, there will be a lot of negotiating and country blackmailing before the final list is established. I would also expect a lot of exceptions for critical metals that are needed for aerospace, military, space and other high-tech industries," a minor metals trading company told Argus this week. "He certainly announced increased tariffs for several products of Chinese origin, but it could take months for any plan to actually be implemented," another market participant said, noting that they would take a more watchful approach rather than follow any knee-jerk reactions from the market. In addition to higher prices for metals imported from China, the other major risk factor associated with a more intensified US protectionist policy is that China will ramp up retaliatory measures in the form of export restrictions on metals for which it holds a dominant supply position. China has instituted export controls on gallium, germanium and antimony since the middle of last year, contributing to a dramatic surge in import prices for the latter two metals in the rest of the world. Supply of tungsten, a critical metal for the mining and aerospace industry, is also dominated by China, and it is widely viewed as the next most likely candidate for export controls. If geopolitical tensions escalate, tungsten supply chains may attempt to relocate to countries that have better relationships with the US. "Countries such as Thailand and South Korea are going to get real busy," a US tungsten recycling company told Argus . Meanwhile, the new US administration could benefit sectors that consume tungsten carbide, including energy and mining. "We will probably see more stability in mining projects in the US and a fast-tracking of permits for strategic metals," a supplier said. Faster permits could also boost the domestic production of antimony in North America, even though most products are still in the early stages of development. Despite hopes that the new US administration could make some tariff exceptions for critical minerals, many such minerals are already subject to import tariffs in the US. On 27 September, president Joe Biden's administration implemented 25pc tariffs on some chromium, cobalt, indium, tantalum and tungsten products imported to the US from China, despite strong opposition from stakeholders across the markets. All five of these metals were included in the US Secretary of the Interior's 2022 critical minerals list. Furthermore, Trump previous administration imposed tariffs on 5,745 items in 2018, including but not limited to, battery metals such as nickel, cobalt, lithium and manganese, as well as key electronics and aerospace metals such as gallium, germanium, bismuth and certain tungsten products. Trump did make exceptions for antimony and rare earths at the time, which he removed from its initial tariff list of more than 6,000 items. Many of these tariffs started out at 10pc in September 2018 but rose to 25pc by May 2019, with mixed impacts. The most recent wave of tariffs from the Biden administration prompted an uptick in demand from US consumers and trading companies between the announcement of the tariffs and their implementation. In the first half of this year, Chinese exports of chromium to the US surged to 6,221t, up by 417pc from the same period a year earlier, as exporters rushed to get material on the water before the tariffs came into force and US chromium buyers sought to build stocks. Likewise, US demand drove up exports of Chinese unwrought tantalum to 162t in January-August, more than doubling from 63t a year earlier, customs data show. The US is highly dependent on unwrought tantalum metal imported from China, with China's supplies accounting for more than half of its total imports in recent years. But in the days immediately following Trump's win, US demand has remained steady. "I expect that only the people who are the most risk-prone or certain about the duties will want to stockpile this early," a trading firm said. By Sian Morris and Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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