Material Insights · Understanding the Material World

Semiconductors and Transformers and power electronics

Power chips, silicon IGBTs and MOSFETs and newer silicon carbide devices, are the switches inside every inverter, drive and charger, so the power electronics build-out for EVs, solar and data centres is a demand driver for a distinct part of the chip industry; in return, chip fabs depend on precision power supplies to run their tools.

Semiconductors (industry) and Transformers and power electronics (energy): 4 relationships.

How they are linked

1. Power chips are the switches

Physical flow · Strong · Power semiconductors to inverters, drives and chargers

An inverter or converter changes AC to DC and back by switching current on and off at high frequency, and the devices doing the switching are power semiconductors: silicon diodes, MOSFETs and IGBTs, and silicon carbide diodes and MOSFETs.

  • USD 32.5 billion world market for power discretes and modules, 2025 (Omdia)
  • about 17% Infineon share of that market, 2025 (Omdia)

Infineon, the largest supplier with about 17% of that market in 2025 on Omdia data, names e-mobility, power infrastructure and AI data centres among its key applications, the same markets that drive power electronics. Power chips are therefore a distinct segment of the chip industry, with their own leading suppliers, separate from the logic and memory makers.

Sources: Infineon Technologies

2. Industry input

Physical flow · Strong · Power electronics to chip fabs and their tool makers

Etch and deposition tools create plasma with radio-frequency power supplies, and lithography and annealing use high-power lasers, so wafer-fab equipment makers depend on precision power electronics; the site rates this 5 of 5 for them.

  • 5 of 5 criticality for wafer-fab equipment makers (plasma and laser power supplies)

This is the reverse flow: chips feed power electronics, and power electronics feed the tools that make chips. Tool makers need these specialised power supplies for each etch, deposition or laser system they ship, so a rise in fab equipment orders raises demand for them too.

Enterprise types that depend on it:

  • Wafer-fab equipment makers: plasma and laser power supplies (criticality 5 of 5)

Sources: Material Insights

3. Silicon carbide versus silicon

Substitution · Rising · SiC devices replace silicon IGBTs in high-voltage uses

Silicon carbide switches lose less energy at high voltage and temperature than silicon IGBTs, so they are taking share in EV powertrains, fast chargers and solar inverters, though they cost more.

  • nearly USD 10 billion SiC device revenue forecast for 2030, Yole
  • about 50% and 70% utilisation of SiC upstream and device lines, 2025
  • about 40% Chinese share of SiC wafer and epiwafer capacity, 2024

SiC demand leans heavily on cars, so the slowdown in the automotive market left the industry with heavy overcapacity after the 2019 to 2024 investment wave. Chinese makers expanding fast in substrates puts pressure on prices, which helps inverter makers but squeezes Western SiC suppliers.

Sources: DQ India

4. India's first SiC fab

Policy · High in India · Indian chip incentives target power devices

India's semiconductor mission has backed a compound semiconductor fab aimed at power devices, linking its chip policy to domestic EV, rail, charger and solar inverter demand.

  • 60,000 SiC wafers a year, planned SiCSem fab in Odisha
  • 96 million units a year packaging capacity
  • about ₹4,600 crore combined investment of four projects approved, August 2025

SiCSem is working with Clas-SiC Wafer Fab of the UK, and the government lists EVs, railways, fast chargers, data centre racks and solar inverters among the intended uses. The project enters a market with low utilisation worldwide, so offtake from Indian power electronics makers will decide its economics.

Sources: Prime Minister's Office, India; DQ India

For investors

Key learnings

  1. Power chips are a USD 32.5 billion market in 2025 whose demand comes from the same EV, solar, grid and data centre build-out that drives power electronics.
  2. SiC is replacing silicon in high-voltage uses, but low utilisation in 2025 and about 40% Chinese wafer capacity point to price pressure on SiC suppliers.
  3. The link runs both ways: wafer-fab equipment makers rely on precision power supplies for plasma and laser tools, so a chip capex upswing also lifts demand for specialised power electronics.

What to track

  • EV sales growth, especially 800 V models: Drives SiC device demand and utilisation (Monthly · IEA, carmaker reports)
  • SiC wafer prices and Chinese capacity: Falling prices cut inverter costs and pressure Western SiC makers (Quarterly · Yole, company results)
  • Power semiconductor vendor results: Order trends show demand from autos, solar and data centres (Quarterly · Infineon, onsemi, STMicro results)

For policymakers

Key learnings

  1. Power devices are a distinct and smaller segment than leading-edge logic, and India's approval of the SiCSem compound semiconductor fab in 2025 shows it is an early target for the country's chip incentives.
  2. EVs, railways, chargers and solar inverters give India domestic demand for power chips, which supports local fabs if procurement favours them.
  3. China held about 40% of SiC wafer capacity in 2024, so supply security for power electronics depends on substrates as well as devices.

What to track

  • SiCSem construction and first output: Shows whether domestic SiC supply arrives (Quarterly · India Semiconductor Mission, Ministry of Electronics and IT)
  • Imports of IGBT and power modules: Measures dependence for inverters, drives and locomotives (Monthly · Ministry of Commerce trade data)

India

In August 2025 the cabinet approved SiCSem's silicon carbide fab in Bhubaneswar, Odisha, planned at 60,000 wafers a year with Clas-SiC of the UK, for uses including EVs, railways, fast chargers and solar inverters.

Sources

  1. Semiconductors: materials, Material Insights (2026)
  2. Infineon company presentation, Q3 FY2026 (Omdia market share data), Infineon Technologies (2026)
  3. Power SiC faces overcapacity downturn, while China accelerates domestic equipment ambitions (Yole Group data), DQ India (2026)
  4. Cabinet approves semiconductor manufacturing units in Odisha, Punjab and Andhra Pradesh with an outlay of Rs 4,600 crore, Prime Minister's Office, India (2025)