Li Auto will form a joint venture with SiC chip maker Sanan Semiconductor and hold a 70 percent stake in the company, a regulatory filing shows.

On June 23 last year, Sanan Semiconductor launched the first phase of a production facility in central China's Hunan province with an investment of up to RMB 16 billion. The company said at the time that it was the first vertically integrated SiC production line in China.

The line will be able to produce 30,000 6-inch SiC wafers per month and is expected to achieve annual sales of RMB 12 billion when the facility is fully operational.

Li Auto's move is laying the groundwork for future models to use SiC chips, which are seen as a must for high-performance electric vehicles.

Mainstream car makers still use IGBTs (insulated gate bipolar transistor chips), but Tesla and BYD have already started using SiC MOSFETs in their Model 3 and Han EV models.

Nio has also mastered the technology through in-house R&D, and on June 22 last year, the company announced that the first SiC electric drive system C prototype for ET7 came off the production line.

The SiC technology is used primarily in the core power electronics of ET7's permanent magnet motor controller, a component that serves to convert DC power from a battery into the AC power required by the motor, Zeng Shuxiang, CEO of Nio's motor business XPT, said at the time.

Earlier this month, Shanghai-based SiC chip startup InventChip Technology announced that it closed a strategic funding round with exclusive participation from Xpeng, just four months after its last round.

InventChip was founded in 2017 in Shanghai Lingang to develop SiC power devices, drive and control chips and SiC power module products.

InventChip has become the first Chinese company to independently develop and master 6-inch SiC MOSFET products and process platforms, it claimed.

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