Not “SiC is slowing,” but “SiC will grow double digits”
The EV slowdown has led to a widespread view that SiC faces a headwind. STMicroelectronics’ Q2 results, announced on July 23, 2026, show that a leading supplier sees a different picture. It expects SiC revenue to grow by double digits year on year in full-year 2026, supported by the transition from 6-inch to 8-inch wafers and demand from AI data centers. Overall Q2 revenue was USD 3.49 billion, up 26% year on year, with a 34.8% gross margin and USD 187 million in operating income.
Q2 figures—the start of recovery
Q2 revenue of USD 3.49 billion was 26% higher year on year, led by growth in automotive. Gross margin was 34.8% and operating income was USD 187 million. The figures point to the start of a semiconductor-cycle recovery.
The outlook is also firm. Q3 revenue guidance is USD 3.70 billion, up 6.2% quarter on quarter, with a 37.0% gross margin; Q4 is expected to exceed USD 4 billion. ST says this growth exceeds normal seasonality of roughly 15% in the second half. Distributor inventories are below their normal target level, and early signs of tighter supply are appearing across several product categories, supporting the demand outlook.
SiC—the 8-inch transition supports double-digit growth
The SiC outlook is the notable point. Against concerns that slower EV sales will cool SiC demand, ST explicitly expects double-digit year-on-year SiC revenue growth in 2026. Its basis is the technology transition from 6-inch to 8-inch (200mm) wafers. Larger wafers increase the number of chips per wafer and lower per-chip cost. Once yields stabilize, they can bring costs into a viable range beyond an EV-only demand case.
This view is consistent with capital being added to SiC in Europe and China. Eight-inch capacity built during the demand trough will determine cost competitiveness during recovery. ST’s outlook is also the self-assessment of a company at the starting line of that competition.
AI data centers—a new growth pillar
The other pillar is AI data centers. ST raised its data-center revenue target to more than USD 1 billion in 2026 and more than USD 2 billion in 2027. For power-semiconductor makers, data centers are no longer merely the use case after EVs; they are becoming a core market alongside EVs. Demand for 800V DC distribution and high-efficiency SiC/GaN power supplies is lifting these figures.
Recovery begins
Q2 revenue rose 26% to USD 3.49 billion. Q3 guidance is USD 3.70 billion and Q4 is expected to exceed USD 4 billion, above seasonality.
Double-digit SiC growth
Despite the EV slowdown, SiC revenue is expected to grow by double digits in 2026, supported by lower costs from the 6-to-8-inch transition.
Data centers as a second pillar
The data-center revenue target was raised to over USD 1 billion in 2026 and over USD 2 billion in 2027.
Signs of tighter supply
Distributor inventories are below target levels, with early signs of supply tightening in several categories.
Business implications and checkpoints
ST’s results call for a renewed look at assumptions in SiC supplier selection. Check: (1) where a prospective SiC supplier is in the 8-inch transition, because its timing directly affects cost competitiveness; (2) the mix of EV and data-center demand, because suppliers with broader end-market exposure can better absorb slower EV demand; and (3) whether a plan is in place to secure needed volume before the signs of supply tightening become material. The simple view that “SiC slows with EVs” is beginning to diverge from at least a leading supplier’s own outlook.