Citrini's Major Report: Wide Bandgap Semiconductors as the Next Undervalued AI Trade

During the first phase of AI infrastructure investment, the logic is simple enough: large models run on GPUs, buy NVIDIA; AI drives the demand for optical modules, buy optical interconnects; storage demand soars, buy Micron and SK Hynix.

Now, this logic is entering a second phase — the "heirs" of the supply chain are emerging.

Citrini Research proposed a core framework in the latest semiconductor memo: AI capital expenditures are becoming the "top predator" of the global economy, sucking up funds and production capacity from every adjacent industry — and the most significant legacy comes from the electric vehicle (EV) and solar industries.

Supply Chain Legacy: Porsche Engineers Lay the Foundation for NVIDIA Racks

In 2017, when Porsche engineers set the 800V powertrain specifications for the Taycan, they could never have imagined that they were laying the foundation for 600kW GPU racks in 2027 — but that is indeed the case.

NVIDIA, in its May 2025 tech blog, attributed the underlying technology of its 800V DC rack architecture to "the EV and solar industries."

Every conversion link from the utility grid to the GPU chip requires wide bandgap semiconductors: silicon carbide (SiC) for front-end voltage reduction to 800V DC, gallium nitride (GaN) for high-frequency voltage reduction to the intermediate voltage needed by the GPU. These two materials have been in mass production for a full five years, driven by electric vehicles, fast charging, and solar inverters.

This "legacy" investment logic is particularly unique: the weaker the original industry (electric vehicles), the deeper the mispricing of these targets, and the higher the cost-effectiveness when AI takes over. Investors do not need an EV recovery for the deal to work; AI demand alone can make the transaction viable.

SiC: From a $3.5 Billion EV Market to AI-Dominant by 2030

The silicon carbide market has expanded from a $300 million industrial niche in 2018 to $3.5 billion by 2024, increasing about 12 times in six years, with EVs as the core driver. Now, this growth is entering a plateau due to slowing EV demand in Europe and competition from Chinese production capacity.

However, AI infrastructure is emerging as a new layer of demand. The first deployments of Rubin platform采用800V架构, and with Rubin Ultra going into mass production and hyperscale cloud computing providers fully committing to 800V DC for new projects, AI-related SiC demand will soar between 2028 and 2030. Citrini estimates that by 2030, AI infrastructure will account for about half of the total SiC demand.

The key point is: companies like STMicroelectronics (STM), ON Semiconductor (ON), and Infineon (IFX), facing a shortage of EV demand, have suddenly had idle capacity at the most needed time. These targets are still priced in the EV sector, not the AI sector — and that's where the asymmetric opportunity lies.

Thousand-Ampere Challenge: VRM Becomes the Fastest-Growing Semiconductor Demand Category

The voltage regulation module (VRM) closer to the chip side is another main line to watch. Rubin Ultra GPU is expected to consume over 2500W, and at a 0.7V core voltage, the VRM needs to deliver about 3500 amperes of current to the chip — through a power plane the size of a paperback book. This is a physical extreme challenge.

The solution is multiphase power supply: From H100 to Rubin Ultra, the number of VRM phases per GPU has quadrupled over five years, and each phase requires a controller IC, MOSFET, inductor, and passive components. Multiplying the growth of phases by the GPU shipment curve, the value growth of VRMs in AI servers exceeds almost all other semiconductor demand categories. The three companies currently dominating the AI VRM market are Monolithic Power Systems (MPWR), Vicor (VICR), and Renesas Electronics.

Stock Focus: Wolfspeed — The Irreplaceable After Bankruptcy Restructuring

Citrini highlighted Wolfspeed (WOLF) in the report, characterizing it as the most extreme expression of "supply chain legacy."

Wolfspeed has invested $6.5 billion in building global silicon carbide capacity, including the world's only 200mm SiC wafer factory operating at commercial scale (Mohawk Valley) and the largest SiC wafer factory in history (John Palmour)