EV Chip Race Heats Up: SiC, GaN, and the Fight for Supply Chain Dominance

NEW YORK, NY – November 03, 2025 – The electric vehicle (EV) sector is surging, and with it, an escalating demand for the semiconductors that power these vehicles. A recent report from MarketsandMarkets projects the EV semiconductor market will reach $57.48 billion by 2032, but beneath the headline numbers lies a complex landscape of technological shifts, supply chain vulnerabilities, and fierce competition.

Beyond Lithium: The Rising Importance of Advanced Semiconductors

For years, the conversation around EVs has centered on battery technology. However, the true enablers of improved range, faster charging, and greater efficiency are increasingly found in the vehicle’s semiconductor components. Unlike traditional internal combustion engine (ICE) vehicles, EVs rely heavily on sophisticated chips for everything from power management and motor control to advanced driver-assistance systems (ADAS) and infotainment. This increased semiconductor content is driving significant growth in the market.

“The shift to EVs isn't just about swapping an engine for a battery,” explains one industry analyst. “It’s a fundamental transformation of the vehicle’s architecture, and that requires a drastically different bill of materials, with semiconductors playing a far more central role.”

The most significant technological leap is the adoption of wide-bandgap semiconductors like silicon carbide (SiC) and gallium nitride (GaN). These materials offer superior performance characteristics compared to traditional silicon, enabling higher efficiency, greater power density, and improved thermal management. SiC is particularly crucial for traction inverters and fast-charging systems, while GaN is making inroads into DC-DC converters.

“SiC and GaN are game-changers,” says a materials science expert. “They allow us to push the boundaries of EV performance and address key challenges like range anxiety and charging times.”

Supply Chain Concerns and the Push for Regionalization

Despite the promising growth prospects, the EV semiconductor market faces significant headwinds, primarily related to supply chain vulnerabilities. The pandemic exposed the fragility of global supply chains, and the automotive sector was particularly hard hit. Geopolitical tensions and trade disputes are further exacerbating these challenges.

“The industry learned a harsh lesson during the pandemic,” notes a supply chain consultant. “Over-reliance on a few suppliers, concentrated in specific regions, is a recipe for disaster.”

As a result, there's a growing push for regionalization and diversification of the supply chain. Governments around the world are offering incentives to attract semiconductor manufacturing investment and reduce reliance on foreign suppliers. The US CHIPS Act, for example, provides billions of dollars in subsidies to encourage domestic chip production. Companies are also investing in new manufacturing capacity and exploring alternative sourcing strategies.

Onsemi's recent acquisitions, including GT Advanced Technologies and Qorvo’s SiC JFET business, and expansion of its manufacturing facilities underscore the commitment to vertical integration and self-sufficiency. Similarly, STMicroelectronics is investing heavily in building new SiC fabrication plants. However, building new semiconductor fabs is a complex and time-consuming process, and it will take years to significantly increase domestic manufacturing capacity.

The Competitive Landscape and Emerging Players

The EV semiconductor market is fiercely competitive, with a handful of established players vying for market share. Infineon Technologies, STMicroelectronics, NXP Semiconductors, Texas Instruments, and Renesas Electronics are among the leading companies in this space.

Infineon currently holds a leading position, particularly in automotive power semiconductors, while STMicroelectronics is a major force in SiC technology. NXP Semiconductors excels in functional safety and control systems, and Texas Instruments offers a broad portfolio of analog and embedded processing solutions.

However, the competitive landscape is evolving rapidly, with new players emerging and established companies investing in innovation. onsemi is gaining ground with its SiC power devices, and Wolfspeed remains a key innovator in this space, despite recent financial challenges. Chinese companies are also making inroads, particularly in the SiC substrate market, increasing competition and driving down prices.

“The competitive dynamics are changing,” explains one industry analyst. “We’re seeing more competition from Chinese vendors, and established players are under pressure to innovate and reduce costs.”

The push towards vertical integration is also reshaping the competitive landscape. Companies are increasingly investing in all aspects of the supply chain, from materials sourcing to chip fabrication, to gain greater control and reduce reliance on external suppliers.

The SiC market, while promising, is demonstrating a recent slowdown, impacting companies like Wolfspeed who have had to undertake restructuring support agreements to reduce debt and manage changing demand.

While the EV semiconductor market faces significant challenges, the long-term growth prospects remain bright. The transition to electric vehicles is accelerating, and the demand for advanced semiconductors will continue to surge. Companies that can innovate, secure their supply chains, and adapt to the changing competitive landscape will be well-positioned to succeed in this dynamic market.