Still Looking for Diamonds

Europe's SiC crisis is not a demand problem—it is a vertical integration failure. The Bulgarian fab's order drought is the terminal symptom of a chain that has been hemorrhaging since 2018: substrate, epitaxy, and device stages are fragmenting as capital migrates to the US and China. With Wolfspeed restructuring, STMicro's SiC revenue still under 15%, and Chinese players (SICC, TanKeBlue) hitting 6-inch cost parity, Europe risks becoming a pure design house with no manufacturing moat. The 800V EV platform roadmap is now hostage to external wafer supply. On compliance, the EU Chips Act's SiC-specific allocation is a rounding error compared to the US CHIPS Act's explicit power-semiconductor targeting. Supply chain sovereignty has shifted from an efficiency metric to an existential one. Strategic read: the 8-inch transition (2025-2027) is the kill filter. The Bulgarian fab either locks in 3-to-5-year offtake agreements by 2026 or gets absorbed. The structural winners are vertical integrators—BYD's in-house SiC stack and Infineon's Linz 8-inch line are the real backup options for European OEMs, not the hollowed-out mid-tier fabs.