ARTICLE 88 / ELECTRICITY
Silicon carbide and power modules underpin the efficiency of electric vehicles, grid converters and industrial drives.
Electricity systems are increasingly controlled by semiconductors rather than by mechanical switching alone. Silicon carbide devices and other power modules convert, regulate and protect power in electric vehicles, solar inverters, battery storage, industrial motors and grid equipment. The chips may weigh little but represent critical performance and supply-chain risk. A converter without the right module, cooling system or qualified firmware cannot enter service even if transformers, cabinets and cables have already reached the project site.
A power module is a technology chain. High-quality wafers, epitaxial layers, device processing, packaging substrates, bond wires, thermal interfaces and final testing all require specialised equipment and manufacturing know-how. For silicon carbide, defect control and wafer yield can strongly influence cost. Package reliability under thermal cycling and high electrical stress can be more important than the nominal device specification. Equipment suppliers therefore qualify specific combinations of chips, modules, gate drivers and cooling systems rather than treat every component as interchangeable.
The EU’s critical-minerals framework identifies silicon metal and several semiconductor-related materials as strategic. The IEA’s 2026 outlook highlights vulnerabilities in refining and production of minor minerals such as gallium and germanium, although not every power-electronics device uses those materials in the same way. Europe’s exposure extends beyond minerals to wafer fabrication, packaging, equipment IP and specialised process inputs. A new domestic assembly factory can still depend on imported dies and manufacturing tools.
EU ETS effects enter mainly through electricity and some upstream industrial materials. CBAM currently targets designated metals, cement, fertilisers, electricity and hydrogen products, not semiconductor devices as a general category. An imported module does not become directly chargeable just because its heat sink is aluminium or its cabinet contains steel. Separate metal goods in a project package may have their own classification and obligations, while future downstream proposals should be treated as scenarios until adopted.
Reliability testing is a decisive commercial differentiator. A power module may pass a factory electrical test yet fail after repeated temperature swings in service. The project should require evidence for thermal cycling, voltage stress, package integrity and cooling interface quality, together with a clear process for investigating failures. In high-voltage installations, replacement may require outages, specialist access and retesting. The resulting cost exceeds the component’s invoice by a wide margin.
European industrial policy can support wafer processing and packaging, but capacity announcements should be assessed against qualified output and supplier acceptance. The most useful data are yield, reliability, process scale and availability of specialised manufacturing equipment. A supplier that makes the final module domestically but imports its critical semiconductor die has improved part of the chain while retaining another dependency. This distinction is essential for realistic assessments of regional technology security.
Investment economics must recognise technical qualification. For a 20-year grid converter, component obsolescence and replacement rights may matter more than a short-term saving in silicon price. Project specifications should define efficiency, thermal performance, fault behaviour, electromagnetic compatibility, testing and failure support. Owners should determine whether they can substitute a second module supplier without redesigning the converter. If they cannot, they need long-term access and spares provisions in the technology agreement.
Factories buying drives or charging systems should model lifecycle electricity savings and availability, not just upfront module cost. Higher switching efficiency may lower heat losses and cooling demand, while reliability failures can negate those gains. The environmental case belongs to a full operating assessment; it is not evidence of an automatic CBAM reduction. Installation and commissioning data should be retained to verify benefits and warranty obligations.
Power semiconductors are a bottleneck where Europe’s energy transition meets global advanced manufacturing. The value of domestic electrical-equipment production will depend on reliable semiconductor supply and engineering control over replacements as much as the carbon intensity of the metals inside the hardware.
