Capital is being added in the demand trough
The SiC industry has faced impairments and delayed investment since the EV slowdown began in 2025. Yet a single week in July 2026 shows that capital flows are not stopping; they are being added in Europe and China simultaneously. On July 14, the European Commission approved EUR 659 million (about JPY 110 billion) in state aid for four semiconductor facilities in Germany, with the largest share—EUR 353 million—going to SiC epitaxial-wafer maker Element 3-5. In China, AccoPower (芯聚能) and Xinyueneng (芯粤能), a vertically integrated automotive-SiC group, reportedly completed a Series D funding round of more than RMB 700 million. Capacity built in the demand trough sets the terms for prices and supply in the next cycle.
Europe—public money for upstream SiC under the Chips Act's first-of-a-kind criterion
The four approved projects lean toward the upstream end of power semiconductors. Element 3-5 in Baesweiler, North Rhine-Westphalia, receives EUR 353 million for an SiC epitaxial-wafer manufacturing facility. Vishay receives EUR 214 million for a power-MOSFET manufacturing plant in Schleswig-Holstein. The others are KLA-Tencor MIE's optical-metrology equipment plant in Hesse (EUR 74.4 million) and KETEK's detector manufacturing site in Munich. All four qualify as first-of-a-kind facilities under the EU Chips Act and are funded jointly by federal and state governments.
Element 3-5 merits particular attention. Substrates and epitaxy are upstream bottlenecks in SiC's cost structure, so an independent European epitaxy source directly broadens procurement options for European device makers including Infineon, Bosch, and ST. Despite the trough in EV demand, the EU continues to put public money upstream on the rationale of supply-chain autonomy.
China—private capital for vertical integration and automotive proof points
China's movement is private capital. According to industry media reports, Guangdong-based AccoPower (芯聚能) and Xinyueneng (芯粤能) jointly completed a Series D capital increase exceeding RMB 700 million (about JPY 14 billion). The supporting operating structure is confirmed in company announcements: the two companies are building a wide-bandgap semiconductor design, manufacturing, and packaging-and-test base in Nansha, Guangzhou, one of the few domestic structures able to carry automotive traction SiC through the full process in China.
Official announcements also confirm operating progress. Traction modules carrying SiC chips made by Xinyueneng (芯粤能) have entered large-scale delivery, while automotive SiC chips passed AQG324 testing and completed automotive-grade validation from chip through vehicle. China's automotive-heavy players are positioning themselves close to the leading SiC growth application.
EU: public capital upstream
Of EUR 659 million approved, EUR 353 million goes to Element 3-5 for SiC epitaxy. An independent European source broadens device makers' procurement options.
Germany: power MOSFETs too
Vishay receives EUR 214 million for a new plant. Public capital is supporting domestic silicon power-semiconductor capacity as well as SiC.
China: private capital for vertical integration
AccoPower (芯聚能) and Xinyueneng (芯粤能) reportedly raised more than RMB 700 million. Their Nansha design-to-manufacturing-to-test base and automotive deliveries are confirmed in company announcements.
Why invest in the trough
Capacity investment during a demand slowdown can become pricing power in a recovery. Europe and China are both investing now.
Business implications and points to confirm
For procurement and investment, the issues to confirm are: (1) when Element 3-5's European epitaxy capacity comes online and how its price and quality compare with established suppliers such as Coherent and SICC; (2) how far Chinese vertically integrated players' automotive records reach toward qualification by overseas OEMs—AQG324 testing has been passed, while broader vehicle adoption is the next hurdle; and (3) whether capacity built through subsidies and incentives becomes sufficient price pressure when demand recovers. Behind the EV-slowdown headlines, SiC supply chains are being remade with European and Chinese capital. The investments made during this trough will shape procurement prices in the recovery.
Ongoing capacity, impairment, supply-agreement, and wafer-scaling moves across major suppliers are tracked in our Power Semiconductor Supply & Capacity Tracker (CSV/JSON available).