Shares of some chipmakers fell Thursday after electric car maker Tesla announced plans to slash the use of silicon carbide transistors in its next-generation vehicle powertrains.
Powertrain engineering leaders at Tesla’s 2023 Investor Day presentation on Wednesday, focused primarily on efficiency and cost control Colin Campbell He took the stage to demonstrate his plans to reduce the cost of the powertrains in his vehicles while maintaining high performance and energy efficiency.
“The Silicon Carbide Transistor I mentioned is clearly a key component in the next powertrain,” Campbell said.[s] It’s expensive, but we found a way to reduce your usage by 75% without compromising your car’s performance or efficiency. “
shares of ON Semiconductor and ST Microelectronics each lost about 2%, wolf speed Shares fell about 7% as investors worried Tesla’s move could portend the auto industry.
Campbell also said Tesla’s new powertrain will have a motor that is completely free of rare earth metals. raw material suppliers, MP-MaterialKnown for supplying neodymium to automakers, reacted by dropping about 11%.
Campbell did not say when the company’s next-generation powertrains would be in mass production and used in the company’s vehicles, nor how much it is currently spending on these transistors. Executives at the event didn’t provide hard details about the “next-generation” Tesla, which some analysts have dubbed the Model 2.
Chips made with silicon carbide transistors are widely used in electric vehicles. They are generally more heat tolerant, longer lasting, and more energy efficient than semiconductors made from silicon power transistors. According to the Institute of Electrical and Electronics Engineers.
Analysts at Bank of America called Tesla’s claims “notable but premature.”
However, the analyst said, “If true, this technological advance poses a significant risk to the SiC materials industry (WOLF, COHR, Rohm) and devices (ON and European peers STMicro, Infineon – Didier Scemama covered). may become,” he admits.
They added a “cheaper” possibility [silicon carbide chips] As EV adoption is likely to accelerate globally, what vendors lose in content may be partially offset by increased EV volume. “
Analysts at New Street Research largely agreed, writing in a note Thursday that the announcement from Tesla is actually a good thing for chip makers.
They wrote about Tesla’s announcement: “The new drivetrain inverter uses a hybrid architecture.” It is a combination of silicon and silicon carbide transistors, with both types of transistors working together to handle peak loads in Tesla vehicles, primarily during vehicle acceleration. “This hybrid architecture is dedicated to new platforms – low-cost, small, low-performance vehicles – and will not be adopted for existing models (S, X, 3, Y) or Cybertruck.”
New Street doesn’t expect lower-priced next-generation Tesla cars to “sell more by 2025 or 2026.”
Wells Fargo analysts are overweight both Wolfspeed and OnSemi stocks with a price target of $110 on them and a price target on OnSemi of $95.
Quoting the Yole Group in a memo on Thursday, Wells Fargo analysts said strong demand from across automakers will keep the supply chain for silicon carbide chips tight in the near term. All growing EV makers try to scale while keeping costs down, but in the short term they will be more concerned about securing supplies of silicon carbide chips for new models. Many of them will be released this year and next year. .
— Michael Bloom contributed to this report.
explanation: This post has been updated to clarify that MP Materials is the raw material supplier.