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The trend of new energy is inevitable, and the localization of IGBT is imperative

2023/08/25

Recently, Times Electric announced that Times Electric invested 111.250 billion yuan to accelerate the expansion of IGBT projects, and the investment direction is medium and low voltage power devices. In addition, the company announced that it has officially become an IGBT module supplier for Valeo's electric drive systems, and has received a large order of <>.<> million units from international car manufacturer Renault.

In 2022, Times Electric's IGBT shipments will be almost the same as Infineon's, and the domestic market share will quickly climb to the first place. It is worth noting that in 2022, it is expected that the global IGBT production capacity will be about 6,2 pieces / month, and domestic manufacturers account for 3/<> of the world.

The investment research team of New Value Capital believes that as a domestic IGBT leader, the expansion and fixed point of Times Electric means that the downstream industry has strong demand, and the supply exceeds the demand under the existing production capacity. Obtained a large order from the world's first-class Tier1 suppliers, and domestic power semiconductors have the ability to enter overseas markets.

The "heart" of new energy

IGBT (Insulated Gate Bipolar Transistor) full name is insulated-gate bipolar transistor, IGBT belongs to one of the highest threshold of Si-based power devices, widely used in medium and high voltage scenarios, known in the industry as the "CPU" of power electronic devices. If the field of integrated circuits represented by CPUs is the "brain" of modern equipment, then power semiconductor chips are the "heart" that provides power.

It is a composite power semiconductor device composed of BJT and MOSFET, which not only has the advantages of high switching speed, high input impedance, small control power, simple driving circuit, and small switching loss of MOSFET, but also has the advantages of low BJT on-voltage, large on-state current and small loss, and is incomparable with other power devices in high voltage, large current, high speed, etc., so it is an ideal switching device in the field of power electronics, and is the main direction of future application development. It is precisely because of the above advantages that IGBTs have developed rapidly since the industrial application began in the late 20s of the 80th century, not only replacing MOSFETs and GTRs in industrial applications, but even expanding to high-power applications dominated by SCR and GTO, and replacing many applications of power devices such as BJT and MOSFET in consumer electronics applications

Downstream industry demand is strong, and existing capacity is in short supply

Although at present, the IGBT market is mainly monopolized by European, American and Japanese enterprises, but in recent years, with the rapid development of new energy vehicles, photovoltaic wind power, as well as 5G base stations, industrial control and other fields, China's IGBT market scale continues to grow, it is expected that China's IGBT market space will reach 2025.601 billion yuan in 30, with a compound annual growth rate of up to <>%.

From the global application proportion of IGBT modules last year, industrial control accounted for 37%, and electric vehicles accounted for 28%. In the future, automotive electrification and intelligence will promote automotive-grade IGBT to become the fastest growing segment, and new energy vehicles will surpass industrial control to become the largest downstream application field of IGBT in 2024, with an average annual compound growth rate of 29.4%, far exceeding the average growth rate of the industry. Due to the development of China's high-speed railway, and the downstream industrial control development is not as good as foreign countries, the downstream application field industrial control 29%, rail transit 28%, new energy vehicles 12%, new energy power generation 8%, but with the continuous development of China's new energy field, the proportion of new energy vehicles and photovoltaic, wind power demand will continue to rise in the future.

Exhibit 1 Downstream market share of IGBT

Source: Yole Develpment, Huaan Securities Research Institute

In the field of new energy vehicles, the value of MOSFETs and IGBTs has increased significantly. From the perspective of MOSFET, according to Yole data and calculations, the value of MOSFET bicycles for new energy vehicles (EV/HEV) is expected to reach $31, an increase of about $19 compared with $12 for traditional fuel vehicles. From the perspective of IGBT, combined with global automobile sales and reports from Yole and Zosi Automotive Research, the value of new energy vehicles (including EVs and HEVs) in 2020 will be about 204 US dollars. Overall market estimate: The domestic electric vehicle IGBT market space has grown from 2020 million US dollars in 2 to 0.2026 billion US dollars in 22, with a CAGR of 3.49%. From the perspective of the MOSFET market, since fuel vehicles also use MOSFET power devices, we estimate that the domestic automotive MOSFET market space will be 9 million US dollars in 2020, and will reach 5 million US dollars in 0, with a CAGR of 2026.6% from 5 to 2020. It can be seen that whether from the value of the vehicle or the CAGR growth rate, IGBT is the leader in automotive-grade power semiconductors, from the perspective of vehicle cost, in 2026~4, the cost of A6 vehicle IGBT in new energy vehicles accounts for 2019%~2021%, second only to the cost of power batteries.

In the field of photovoltaic wind power, the electric energy output of new energy power generation needs to be reversed into alternating current that meets the requirements of the power grid through photovoltaic inverters or wind power inverters, and IGBT modules are the core devices of photovoltaic inverters and wind power inverters. With the continuous advancement of domestic photovoltaic parity projects, the increase in demand in emerging markets and the growing energy crisis in Europe, it is expected that the installed capacity of photovoltaics at home and abroad will continue to increase, driving the demand for IGBT modules to increase steadily.

Exhibit 2 China's PV, wind power installed capacity and IGBT market size are expected to continue to grow (unit: GW, billion yuan)

Data source: China Photovoltaic Industry Association, GWEC, Open Source Securities Research Institute

IGBT国产化势在必行

The imbalance between supply and demand in the global IGBT market has a huge impact on China's semiconductor industry and automotive industry. While facing difficulties, local IGBT companies have also ushered in the opportunity of strong rise, and it is possible to greatly increase the localization rate of IGBT. In the past year, the global supply chain crisis has affected many industries, and the semiconductor sector has attracted particular attention. According to authoritative data from the industry, the current market gap of automotive-grade IGBTs, core components of automotive electronic control systems, is as high as 50%. It is worth mentioning that the current supply side capacity is close to saturation and cannot meet the growing market demand.

Recently, semiconductor giant Infineon publicly stated that its order backlog is serious, and the order amount in the first quarter alone exceeded 3 times last year's total revenue. In the case of imbalance between supply and demand, China's IGBT related industrial chain has been greatly affected, which also makes improving the localization rate of IGBT become a general trend.

Chart 2022Q1 IGBT power module domestic installed capacity

Data source: NE Era, Open Source Securities Research Institute

Wu Dillon, senior investment manager of New Value Capital, believes that in the past, the overseas and domestic IGBT market was mainly occupied by foreign manufacturers such as Infineon, Mitsubishi, Fuji Electric and so on. As the downstream industry continues to maintain a high prosperity, domestic IGBT manufacturers continue to expand production to form large-scale cost advantages, R&D technology gradually catches up with foreign manufacturers, domestic manufacturers have more accurate market insight capabilities, and domestic substitution accelerates. Domestic IGBT manufacturers' revenue growth will accelerate and continue to seize the global market share.

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