At present, owing to the inherent limitations of the material characteristics of Si based semiconductor materials, Si based semiconductors are facing more and more challenges in meeting the performance requirements of the rapidly developing modern power electronic technologies used in semiconductor devices. As a new generation of semiconductor material, SiC has significant performance advantages, but it is difficult to process the SiC wafers with high-quality and high-efficiency in their industrial application. Reviewing the research progress of ultra-precision machining technology of SiC in recent years, we introduce plasma oxidation modification based highly efficient polishing technology of SiC in this paper. The material removal mechanism, typical device, modification process, and polishing result of this technology are analyzed. The analysis shows that the plasma oxidation modification possesses high removal efficiency and atomically flat surfaces without surface or subsurface damages. Furthermore, aiming at step-terrace structures produced during SiC surface processing with different polishing technologies, the generation mechanism and control strategy of periodic atomic layer step-terrace structures are discussed. Finally, the development and challenge of plasma-assisted polishing technology are prospected.