BYD Starts Buying IGBT Modules From Suppliers Other Than Its Semiconductor Unit

BYD has officially placed an order with chipmaker Hangzhou Silan for automotive IGBTs, totaling 100 million yuan ($16 million), said on Thursday, citing sources familiar with the matter. BYD previously sourced its IGBT modules from its semiconductor division.

In the first half of 2021, Silan’s IGBT device revenue was 190 million yuan, up 110% year-on-year. The packaged products of automotive IGBT modules have entered the stage of batch supply. Previously, the company only provided products for customers such as LeapMotor.

People close to BYD said that the news is true. “This is partly because BYD Semiconductor’s production capacity is really tight, and partly to compress its related transactions with BYD Group.”

It was not only Silan that got the orders, but also StarPower Semiconductor, Times Electric and China Resources Microelectronics, the person said, adding that almost all manufacturers that have passed BYD’s verification were included. Automotive products have extremely high requirements on reliability and safety, and have a very strict certification process. The verification period of downstream manufacturers is more than one year.

BYD Semiconductor has a complete industry chain of automotive-grade IGBTs including design, manufacturing, packaging and complete vehicle applications. On June 30 this year, BYD, which is listed in Shenzhen, announced that the application to spin off its subsidiary BYD Semiconductor to ChiNext, a Nasdaq-style subsidiary of the Shenzhen Stock Exchange, for listing. However, it was suspended on August 18.

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BYD Semiconductor’s affiliate transactions with BYD Group have become a focal point of concern for potential investors. According to the IPO application updated by BYD Semiconductor on December 1, its related sales revenue to BYD Group in 2020 and the first half of 2021 were 851 million yuan and 670 million yuan, respectively, accounting for 59.02% and 54.24% of its total revenue in the periods.

As for why choosing Silan, a senior researcher from a private equity institution said: “First of all, automakers prefer IDM model manufacturers who can guarantee production capacity independently. Secondly, the scale of Silan’s capacity is at the forefront of China.”