(News Bulletin 247) – The car manufacturer specializing in electrics has indicated that it wants to reduce its consumption of silicon carbide, a component supplied by the Franco-Italian group and on which the company has ambitions.

In the semiconductor industry, some large customers, such as Apple, can very quickly cause major stock market movements with their announcements. If necessary this Thursday with the electric vehicle specialist Tesla. The group led by Elon Musk held a disappointing investor day overnight from Wednesday to Thursday, with no new product, as analysts awaited the announcement of a new model at less than $30,000.

On the other hand, the automaker gave indications on its future industrial projects which had significant repercussions on several groups on the stock market. As Bloomberg reports, Colin Campbell, director of propulsion-related engineering at Tesla, said the group decided to design a technology that would use 75% less silicon carbide than it currently does.

“Silicon carbide is a fabulous semiconductor, but it’s also expensive and really hard to scale,” he said. “So using less is a big win for us.”

More than a billion in revenue in 2023

“Tesla wants to ‘redesign’ the module that manages the current between the battery and the motor and in which Tesla uses components from STMicroelectronics. This is a source of revenue that can be estimated at around 3% of total revenues of the group”, advances an analyst specializing in the sector.

Silicon carbide is a semiconductor compound with properties to convert energy with high efficiency. This compound has important industrial applications, particularly in electric vehicles. It is therefore a key element in automotive electrification.

STMicroelectronics has recently joined forces with the French group Soitec in silicon carbide, adopting the “SmartSic” technology of the Isère company.

The Franco-Italian group also generated 700 million dollars in revenue with silicon carbide last year, posting an order book of 115 projects spread over 80 customers. In 2023, STMicroelectronics is aiming for more than 40% growth in this area, since the company aims to exceed one billion euros in revenue with this compound.

Other groups mistreated on the stock market

“Tesla held an investor day yesterday with statements on silicon carbide. From STMicroelectronics, we confirm the guidance on our silicon carbide business given so far,” the company said in an email. News Bulletin 247.

Still, the market is giving in to concern. On the Paris Stock Exchange, the title STMicroelectronics shows the largest drop in the CAC 40, with a decline of 5.3% around 2:10 p.m.

“The fall in the price seems exaggerated. Especially since we do not know if Tesla will not collaborate with STMicroelectronics to redefine its module”, judges the financial analyst. According to him “STMicro is the leader in silicon carbide, with a market share twice that of the second, Infineon”.

STMicroelectronics isn’t the only semiconductor company to take a beating from Tesla’s announcements. The American Wolfspeed, which specializes in silicon carbide, plunged 12.4% on Wall Street in pre-opening trading. Infineon Technologies gives up 2.1% on the Frankfurt Stock Exchange.