Power Semiconductor Price Divergence: SiC Penetration Rate Accelerates, Thai Power Component Supply Chain Faces Structural Opportunity

In the midst of AI servers capturing market attention, a change closer to the fundamentals of the manufacturing industry is quietly unfolding in the power semiconductor sector. Unlike the cyclical ups and downs of memory and logic chips, the power semiconductor market currently exhibits a rare "structural differentiation": on one side, standard MOSFETs and IGBTs are under pressure due to the continued output capacity from mainland China's mature manufacturing processes; on the other, wide bandgap components, represented by Silicon Carbide (SiC) and Gallium Nitride (GaN), maintain relatively firm pricing and premium capability due to their rapid climbing penetration rates in the electric vehicle and green energy sectors. For the Thai semiconductor industry, which leads in power component packaging, this differentiation trend is redefining the value distribution of regional supply chains. ## From Equal Gains and Losses to Price Differentiation: New Characteristics of the Power Semiconductor Cycle Looking back at the semiconductor cycle, power semiconductors once experienced shortages and price hikes due to the boom in electric vehicles and industrial demand, with automotive-grade MOSFETs and IGBT modules being the most sought-after components in the supply chain. However, as consumer electronics recovery weakens and industrial customers enter inventory digestion phases, compounded by large-scale expansion of power semiconductor manufacturers in mainland China for low-voltage MOSFETs and standard IGBTs, price competition for standard power components has intensified, with some consumer applications even resorting to price-based exchanges. But differentiation is also emerging at this time. The demands for component reliability in automotive and high-voltage industrial applications act as a natural barrier for certification, suppliers with automotive certification and long-term customer bases command significantly more resilient pricing. Meanwhile, wide bandgap components, still in the penetration ramp-up phase, although their unit prices are slowly declining with decreasing substrate costs, the "performance-for-penetration" path is accelerating the substitution of silicon-based solutions in high-end applications, creating a virtuous cycle of volume growth offsetting price decline. This combination of "standard component price wars and high-end component price increases" is the core characteristic of the current power semiconductor market. ## Three Engines Driving Increasing Penetration Rates ### Electric Vehicles Become the Main Application Scenario for SiC As major automakers accelerate the adoption of 800V high-voltage platforms, the penetration rate of SiC rapidly increases in main inverters, vehicle chargers, and DC-DC converters. Compared to silicon-based IGBTs, SiC solutions can significantly reduce switching losses at high voltages, shrink system volume, and improve range performance. Although the unit price of components is higher, they are gradually becoming economical from a whole vehicle system cost perspective. Thailand, as the largest automotive manufacturing base in Southeast Asia, is at a critical juncture in the transition from internal combustion engines to electric vehicles, and the strategic value of local power module packaging and assembly capacity is rising. ### Green Energy Opens a Second Growth Curve The demand for high-efficiency power components for solar inverters, energy storage systems, and charging stations is equally strong. Southeast Asian countries are continuously raising renewable energy targets, driving increased usage of multilayer inverters and microinverters for MOSFETs and SiC components, providing a second pillar for the regional power component supply chain beyond electric vehicles, and partially offsetting the weakness in consumer demand. ### Data Center Power Upgrades Drive GaN Adoption The power density of AI servers is significantly increasing, and power architectures are evolving towards higher efficiency topologies. The adoption of GaN and high-voltage SiC in server power supplies and uninterruptible power supplies is clearly increasing. Notably, this demand trend is directly linked to the AI computing wave, allowing power semiconductors, which were previously disconnected from AI topics, to share in the benefits of computing infrastructure development.

Thailand: The Invisible Weight of Power Component Testing

Many investors first think of hard drives and packaging in Thailand's semiconductor industry, but power components are actually the most fundamental part of Thailand's semiconductor landscape. Several Japanese and European IDM giants have established bases in Thailand for backend testing, module assembly, and quality verification, accumulating deep capabilities in automotive-grade process management and engineering talent pools. As the requirements for packaging technology for automotive power modules shift from traditional soldering to techniques like silver sintering and double-sided cooling, Thai facilities with mature backend capabilities are becoming increasingly important pivots in the global capacity allocation of IDM giants. On policy grounds, the Thailand Investment Promotion Committee has recently continued to include electric vehicle key components, power semiconductor testing, and passive components in key incentive items. This aligns with electric vehicle industry promotion measures to attract automakers and battery, power drive system suppliers, gradually forming a regional cluster from upstream materials and testing to downstream vehicle assembly. For the power component supply chain, the advantage of being "close to automakers" is the moat that Thailand has that is most difficult for other Southeast Asian countries to replicate.

Investment Perspective: How to Position in a Divided Market

• Segment Product Structure: Power semiconductors have distinctly different price resilience depending on whether they are consumer standard components or automotive wide-gap components. When evaluating, focus on their automotive certification coverage and long-term order share, avoiding the red ocean of low-power consumer products.
• Focus on Testing Added Value: The technical threshold for power module packaging is rapidly rising. Facilities with advanced packaging processes and automotive quality systems for testing have a clear advantage in pricing over standard packaging, giving Thai facilities a natural advantage in this segment.
• Track Penetration Rate Rather Than Absolute Price: Price declines in wide-gap components are a necessary path to increased penetration rate. Growth in design introduction parts and shipment volume is a more reliable indicator of market trends; focusing solely on price can lead to misjudgments of industry trends.
• Pay Attention to Geographical and Trade Variables: Against the backdrop of supply chain diversification, the strategic position of Southeast Asian production is continuously rising, but changes in international trade policies and tariff environments may still cause temporary disruptions to the power component chain heading for export in the region.

Conclusion

The price differentiation in the power semiconductor market is essentially a redistribution of value driven by the upgrading of application structures. When standard components fall into a red ocean competition, supply chain segments with automotive capabilities and wide-gap layouts gain a clearer growth path. For Thailand, the convergence of the automotive industry transformation and power component testing fundamentals gives it a unique position in this structural change; for investors, rather than chasing a rising market trend, it is better to deeply understand the industry logic behind the penetration rate curve, as that is where the real opportunity in the next phase of power semiconductors lies.