SiC & GaN Device Pricing Tightens: Raw Material Costs Drive H2 2026 Adjustments
Prices for Silicon Carbide (SiC) and Gallium Nitride (GaN) power devices are projected to increase in the latter half of 2026, primarily driven by rising raw material costs, particularly SiC substrates and GaN epitaxy processes. This trend is expected to impact EV power electronics and industrial power supply manufacturers.
The robust demand for electric vehicles (EVs) and renewable energy systems continues to fuel the expansion of the Silicon Carbide (SiC) and Gallium Nitride (GaN) power device markets. However, the consistent upward trajectory in the cost of critical raw materials, notably high-purity SiC substrates and the specialized precursors required for GaN epitaxy, is now exerting significant upward pressure on the pricing of finished power semiconductors. Component manufacturers are indicating that these input cost escalations are becoming unsustainable without corresponding adjustments to their end-product pricing, signalling a shift for procurement teams in H2 2026.
Preliminary forecasts from market intelligence firms suggest that average selling prices (ASPs) for discretes and modules utilizing these wide-bandgap technologies could see a modest but firm increase of 3-7% across various product categories before year-end. This adjustment reflects not only the direct material cost impact but also the increased capital expenditure required for advanced processing equipment capable of handling these complex materials. Suppliers are grappling with extending long-term contracts under current pricing structures, leading to more frequent re-negotiations and a push for shorter-term agreements.
Procurement engineers and supply chain managers in the automotive, industrial power, and data center sectors are advised to review existing supply agreements for SiC MOSFETs, GaN HEMTs, and related modules. The anticipated price hikes will likely necessitate re-evaluating budget allocations and exploring potential long-term indexing clauses in new contracts. Diversification of sourcing strategies might also become more critical to mitigate single-supplier dependency and absorb potential cost volatility from specific raw material streams. Manufacturers are keen to pass these costs through, citing sustained high demand and limited expansion of raw material supply in the near term.
Looking ahead, while investments in new SiC boule growing and GaN epitaxy capacity are underway, these expansions are not expected to fully alleviate raw material cost pressures until late 2027 or early 2028. In the interim, the pricing environment for SiC and GaN devices is anticipated to remain tight, with little room for significant downward negotiation. This sustained pressure underscores the strategic importance of secure raw material supply lines for the wide-bandgap semiconductor industry.