Core Viewpoint - Shenzhen Basic Semiconductor Co., Ltd. is seeking to list on the Hong Kong Stock Exchange, focusing on silicon carbide (SiC) power devices, with significant losses exceeding 800 million RMB over the past three years [1][2][3] Financial Performance - The company reported revenues of 117 million RMB, 221 million RMB, and 299 million RMB from 2022 to 2024, with corresponding losses of 242 million RMB, 342 million RMB, and 237 million RMB [2][3] - The revenue from SiC power modules increased significantly, accounting for 4.3%, 34.9%, and 48.7% of total revenue during the same period, while revenue from gate drivers decreased from 45.8% to 26.8% [2] - The overall gross margin was negative, with figures of -48.5%, -59.6%, and -9.7% over the three years [3] Research and Development - The company has high R&D costs, with expenditures of 59.4 million RMB, 75.8 million RMB, and 91.1 million RMB, representing 50.8%, 34.4%, and 30.5% of total revenue [4][5] - The high R&D costs are attributed to the nature of the semiconductor industry, which requires significant investment in technology and manufacturing processes [3][8] Customer Base and Revenue Concentration - Major customers include automotive manufacturers and high-tech companies focused on renewable energy, with revenue from the top five customers increasing from 32.2% to 63.1% of total sales over the reporting period [4][6] - The company faces risks related to revenue concentration, as over 50% of total revenue comes from a small number of clients [8] Capital Expenditure and Cash Flow - Capital expenditures were significant, with amounts of 212 million RMB, 146 million RMB, and 36.6 million RMB over the reporting period, aimed at expanding production capacity and upgrading equipment [5][9] - The company has recorded negative cash flow from operating activities for three consecutive years, with net cash outflows of 307 million RMB, 12 million RMB, and 24.1 million RMB [5][8] Debt and Liquidity - The asset-liability ratio increased significantly, reaching 85% by the end of 2024, indicating a deteriorating liquidity position [6][8] - The company’s total liabilities rose from 347 million RMB to 799 million RMB over the reporting period, raising concerns about its ability to meet financial obligations [7][8] Market Position and Future Outlook - Basic Semiconductor is positioned as a key player in the SiC power device market, ranking seventh globally and sixth in China, with a focus on the growing electric vehicle sector [1][2] - The company aims to leverage its technological advantages and patents to capture market share in the rapidly evolving semiconductor landscape [8][9]

Core Viewpoint - The MOSFET industry in China is experiencing significant growth driven by the demand from sectors such as consumer electronics, communication, industrial control, and automotive electronics, with a projected market size of 42.944 billion yuan in 2024, reflecting a year-on-year growth of 7.67% [1][11]. Industry Overview - MOSFET (Metal-Oxide-Semiconductor Field-Effect Transistor) is a semiconductor device that controls current using electric fields, consisting of a metal gate, an insulating oxide layer, and a semiconductor substrate [2]. - The industry has evolved through four main stages, from initial development before 2010 to the current phase of domestic substitution, where local manufacturers are increasingly producing high-end products [4][5]. Industry Development History - The industry has transitioned from a pioneering phase before 2010 to a period of local alliances from 2011 to 2013, followed by structural reforms from 2014 to 2016, and now to a phase of domestic substitution since 2017 [4][5]. Industry Supply Chain - The upstream of the MOSFET industry includes raw materials and production equipment, while the midstream focuses on manufacturing, and the downstream applications span automotive electronics, consumer electronics, industrial control, and communication devices [7]. Market Size - The demand for MOSFETs is rising due to the proliferation of 5G technology, the boom in the electric vehicle market, and increasing industrial automation [11]. - The performance of silicon-based MOSFETs is improving, and third-generation semiconductor devices like SiC MOSFETs are being commercialized, enhancing charging efficiency and range for electric vehicles [11]. Key Companies' Performance - The competitive landscape of the MOSFET industry is characterized by dominance from overseas giants like Infineon and ON Semiconductor, while domestic firms such as Huazhu Microelectronics, Silan Microelectronics, and New Clean Energy are emerging as leaders [13]. - Huazhu Microelectronics reported a revenue of 2.355 billion yuan in Q1 2025, a year-on-year increase of 11.29%, with a net profit of 83 million yuan, up 150.68% [14]. - Silan Microelectronics achieved a revenue of 11.221 billion yuan in 2024, reflecting a growth of 20.14%, with R&D investment reaching 1.084 billion yuan, up 22.93% [16]. Industry Development Trends - The market size of the MOSFET industry is expected to continue expanding, particularly in the electric vehicle sector, where demand for high-performance MOSFETs is increasing [18]. - Technological innovation is accelerating, with third-generation semiconductor materials like SiC and GaN gaining traction, promising higher efficiency and performance [19][20]. - The trend of domestic substitution is strengthening, with local companies improving their competitiveness and reducing reliance on foreign products, while also integrating the supply chain [21].

2025 年 06 月 30 日 投资策略 估值与盈利周观察——6 月第 4 期：普涨 市场估值普涨，创业板指、成长居前。上周宽基指数估值普涨，创业 板指表现最优，红利表现最弱。从 PE、PB 偏离度的角度看，食品饮料、 农林牧渔、公用事业等行业估值较为便宜。向前看，本周市场 ERP 下降， 处于 21 年以来历史均值附近。 市场表现：微盘股、创业板指、成长表现最好；红利、消费、稳定表 现最弱。 行业表现：计算机、国防军工、非银金融涨幅前三，石油石化、食品 饮料、交通运输表现最弱。 相对估值：创业板指/沪深 300 相对 PE 上升，创业板值/沪深 300 相 对 PB 上升。 全 A ERP：ERP 较前一周下降，处于 21 年以来历史均值附近。 指数 PEG & PB-ROE: 红利 PEG 值最小，科创 50 风格 PB-ROE 值最小。 大类行业估值：金融地产估值高于 50%历史分位，原材料、设备制造、 工业服务、交通运输、消费、科技历史估值处于 50%左右及以下水平。 一级行业估值：各行业估值普涨，非银金融、农林牧渔、家电、食品 饮料估值处于近一年低位。 热门概念：无人驾驶、半导体材料、培育砖石、第 ...

Core Viewpoint - The power semiconductor market is expanding significantly due to the global trend of automotive electrification and the "dual carbon" strategy, with leading domestic company SIDA Semiconductor (603290.SH) planning to issue convertible bonds totaling up to 1.5 billion yuan [1][6]. Summary by Sections Fundraising Purpose - The funds raised from the convertible bonds will be primarily allocated to four areas, focusing on three industrialization projects related to core components for new energy vehicles (NEVs) [2]. - The largest portion, 600 million yuan, will be invested in the manufacturing project for automotive-grade SiC MOSFET modules, which are critical for the main drive system control modules in NEVs due to their high voltage, high frequency, and high efficiency characteristics [2]. - The IPM (Intelligent Power Module) manufacturing project targets high-frequency medium-voltage applications such as NEV air conditioning and electric compressors, with a projected demand of 440 million units in 2024, reflecting a year-on-year growth of 20.8% [2]. - The automotive-grade GaN module industrialization project aims to establish a complete process platform for GaN chip packaging, testing, and system integration, focusing on next-generation semiconductor technologies [2]. Company Performance - Since its IPO in 2020, the company's revenue has surged from 963 million yuan to 3.663 billion yuan by 2023, while net profit increased from 181 million yuan to 911 million yuan [5]. - However, in 2024, the company experienced its first simultaneous decline in revenue and net profit since 2016, with revenue dropping to 3.391 billion yuan (a 7.43% decrease) and net profit falling to 508 million yuan (a 44.24% decrease) [5]. Competitive Landscape - The global power semiconductor market is dominated by international giants like Infineon and ON Semiconductor, indicating that domestic companies still face challenges in technology accumulation and production capacity [8]. - The domestic SiC industry is rapidly developing, with companies like Shanxi Tiancheng achieving mass production of 8-inch SiC single crystal substrates, and Jie Square Semiconductor's first 8-inch SiC wafer factory expected to be operational by 2027 [8]. - The ability of SIDA Semiconductor to maintain its competitive edge amidst fierce competition will depend on its future technology transformation and mass production capabilities [8].

Core Viewpoint - The company plans to issue convertible bonds to raise funds for three key projects: the manufacturing of automotive-grade SiC MOSFET modules, IPM modules, and the industrialization of automotive-grade GaN modules, along with supplementing working capital. This initiative aligns with national industrial policies and the company's strategic development direction, aiming to enhance market competitiveness and financial stability [1][17]. Group 1: Fundraising and Investment Plans - The total amount to be raised from the convertible bond issuance is up to RMB 150,000 million, with a total investment plan of RMB 203,433.29 million across various projects [1]. - The company will initially use its own or raised funds to start projects before the bond proceeds are available, ensuring project continuity [1]. Group 2: Project Necessity Analysis - The automotive-grade SiC MOSFET module project aims to leverage industry opportunities and maintain the company's leading position in the automotive semiconductor market, particularly for electric vehicles [2][3]. - The IPM module project responds to the national "dual carbon" strategy and aims to meet the growing market demand for energy-efficient white goods, with a projected domestic demand of 440 million units by 2024, reflecting a 20.8% year-on-year growth [4][10]. - The automotive-grade GaN module project focuses on enhancing technical capabilities and expanding product offerings in the rapidly growing electric vehicle sector, with the GaN power device market expected to reach USD 2.6 billion in 2023 [6][11]. Group 3: Feasibility Analysis of Investment Projects - The rapid development of the new energy vehicle industry provides a broad market space for the SiC MOSFET module project, with projected sales of 1,288.8 million units in China by 2024, a 34.4% increase year-on-year [7][8]. - The company's strong brand image and established customer relationships in the power semiconductor sector provide a solid foundation for the successful implementation of these projects [9]. Group 4: Economic Benefits and Financial Impact - The SiC MOSFET module project has a total investment of RMB 100,245.26 million, with RMB 60,000 million sourced from the bond issuance [12][13]. - The IPM module project requires an investment of RMB 30,080.35 million, with RMB 27,000 million from the bond proceeds, aimed at expanding production capacity [14][15]. - The GaN module project involves an investment of RMB 30,107.68 million, with RMB 20,000 million from the bond issuance, focusing on enhancing production capabilities [16]. Group 5: Overall Impact on Company Management and Financial Status - The issuance of convertible bonds is expected to enhance the company's core competitiveness and risk resistance, aligning with long-term development goals [17]. - The financial structure will improve as the asset scale expands, potentially lowering the debt-to-asset ratio and increasing net assets over time [17][18].

证 券 研 究 报 告 碳化硅：国内弯道超车趋势已现 ——化合物半导体系列报告之三 证券分析师： 杨海晏 A0230518070003 杨紫璇 A0230524070005 联系人：杨紫璇 A0230524070005 2025.6.27 主要内容 2 1. 海外大厂收缩，SiC竞争格局或收敛 2. 国内厂商在各环节打破垄断 3. 标的梳理 4. 风险提示 投资要点 www.swsresearch.com 证券研究报告 3 ◼ 碳化硅具有耐高温、高压等优势，渗透率提升空间大。随着应用场景提出更高的要求，以碳化硅、氮化镓等 为代表的第三代半导体材料发展迅速。与第一代半导体材料硅相比，碳化硅具备更高的击穿电场强度、饱和 电子漂移速率、热导性和热稳定性，更适合在高压、高频、高功率等领域中应用，并且能实现器件小型化、 轻量化。根据Yole数据，2024年SiC材料渗透率从2020年4%提升到15%。 ◼ 海外大厂发生较多变动，SiC竞争格局或收敛。Wolfspeed在2024年关闭达勒姆6英寸工厂，2025年5月正 式启动破产保护申请程序，近期宣布将依据重组协议申请破产；瑞萨电子终止原定2025年量产的群马县SiC ...

Group 1 - The semiconductor industry relies heavily on both wafer fabs and packaging/testing plants, with wafer fabs responsible for manufacturing chips from designs and cutting them into individual dies, while packaging/testing plants focus on the subsequent packaging and testing processes [1] - Hanxin Technology has invested 1.2 billion in a packaging/testing plant in Zhejiang, which has recently completed its main structure, and upon full production, it is expected to achieve an annual output of 300,000 silicon carbide power modules and 50 million silicon carbide power devices, addressing the growing demand in the high-voltage silicon carbide market [1][4] - The establishment of this plant will enhance Hanxin Technology's annual shipment capacity of silicon carbide devices, alleviating market supply and demand pressures [1] Group 2 - The new packaging/testing project by Hanxin Technology's subsidiary in Lishui marks significant progress in the industrialization of third-generation semiconductors, improving production autonomy and accelerating R&D iterations [3] - The project site is strategically located near transportation hubs, with the nearest high-speed rail station approximately 25 km away and the nearest airport about 163 km away, facilitating logistics and operations [4] - Hanxin Technology, established in October 2019, focuses on the R&D and production of third-generation wide bandgap semiconductor power devices and modules, with its silicon carbide products covering voltage platforms from 650V to 3300V, achieving international leading technology levels [4]

Core Viewpoint - The change of control in *ST Huamei from Shanghai Pengsheng to Jilin Yadong State Capital Investment aims to resolve financial issues and promote the high-quality development of the semiconductor industry in Jilin Province [1][2]. Group 1: Shareholder Change and Financial Implications - The controlling shareholder, Shanghai Pengsheng, will transfer 214 million shares (22.32% of total shares) to Jilin Yadong, with the transfer price primarily used to repay 1.556 billion yuan of occupied funds and interest [1]. - The transaction is expected to resolve the issue of 1.491 billion yuan of non-operational fund occupation by Shanghai Pengsheng and its affiliates, as mandated by the China Securities Regulatory Commission [2]. Group 2: Strategic Importance and Industry Impact - The strategic takeover by state capital is seen as beneficial for creating a sustainable development foundation for the company and addressing historical financial issues caused by the previous controlling shareholder [2]. - The transaction aligns with the broader goal of stabilizing the domestic semiconductor industry and is expected to inject new vitality into the sector by diversifying development paths [2][3]. Group 3: Company Operations and Future Focus - *ST Huamei specializes in power semiconductor devices and is one of the few domestic companies adopting the IDM model, focusing on full industry chain project construction and product innovation [3]. - The company plans to enhance its chip manufacturing capabilities and establish production bases centered on strategic emerging fields such as automotive electronics and renewable energy [3]. Group 4: Governance and Operational Mechanism - Post-transaction, *ST Huamei will become a mixed-ownership listed company with relative state capital control, aiming to establish a market-oriented governance structure and operational mechanism [3][4]. - Jilin Yadong has committed to maintaining the flexibility and dynamism of the company's market operations while ensuring compliance and stimulating innovation [4].

Core Viewpoint - The article discusses the evolution and challenges faced by Wolfspeed (formerly CREE) in the silicon carbide (SiC) semiconductor market, particularly in the context of the electric vehicle (EV) industry and the company's strategic decisions that led to its decline. Group 1: Company Background and Market Position - CREE, founded in 1987, initially struggled for recognition in the semiconductor industry until the rise of electric vehicles, particularly Tesla's Model 3, highlighted its dominance in SiC production, holding 60% of the global SiC wafer capacity [3][5]. - The transition from traditional silicon to SiC in Tesla's Model 3 inverter showcased the advantages of SiC, such as lower weight and higher efficiency, which positioned CREE as a key player in the EV supply chain [4][8]. Group 2: Strategic Decisions and Market Dynamics - In 2017, under new CEO Gregg Lowe, CREE shifted focus from LED to SiC semiconductors, leading to a significant increase in semiconductor revenue share from 10% to 53% by 2021 [20][19]. - The rebranding to Wolfspeed and the divestment of the LED business were bold moves aimed at solidifying its position in the SiC market, but the company faced challenges in scaling production and managing costs [21][20]. Group 3: Production Challenges and Competitive Landscape - The production of SiC wafers is complex and costly, with slower growth rates compared to silicon wafers, leading to high production costs and inefficiencies [13][9]. - As the EV market expanded, competition intensified, with other companies entering the SiC space, leading to a need for Wolfspeed to either expand its 6-inch wafer capacity or invest in 8-inch wafer production [24][26]. Group 4: Financial Performance and Future Outlook - Despite initial optimism, Wolfspeed's financial performance deteriorated, with a 12% revenue decline in 2024 and significant stock price drops, attributed to underutilization of its new 8-inch facility and rising competition from Chinese firms [34][37]. - The company's heavy investment in 8-inch production without immediate returns raised concerns among investors, leading to a significant drop in market value and ultimately resulting in bankruptcy proceedings [40][39]. Group 5: Industry Implications - The article highlights the broader implications for the semiconductor industry, emphasizing that cost control is critical in a highly competitive market where product standardization is prevalent [41][42]. - The challenges faced by Wolfspeed may signal a larger trend of consolidation and restructuring within the semiconductor supply chain, particularly in the context of the evolving EV market [45].

Core Viewpoint - The article discusses the rise and fall of Wolfspeed, a company specializing in silicon carbide (SiC) technology, highlighting the challenges and market dynamics in the semiconductor industry, particularly in the context of electric vehicles (EVs) and the competition in SiC production. Group 1: Company Background and Transition - CREE, founded in 1987, initially struggled in the semiconductor industry but gained prominence with the rise of electric vehicles, particularly Tesla's Model 3, which utilized SiC technology [3][4] - CREE held 60% of the global SiC wafer production capacity, leading to a strategic pivot to focus entirely on SiC by rebranding as Wolfspeed [6][24] - The transition was marked by a significant increase in the semiconductor business's revenue share, from 10% in 2017 to 53% in 2021, following the sale of its LED business [24][20] Group 2: Market Dynamics and Challenges - The demand for SiC in EVs surged, with each vehicle requiring approximately 100-150 SiC chips, leading to increased competition as other manufacturers entered the market [29][31] - Wolfspeed faced a critical decision between expanding 6-inch wafer production or investing in 8-inch wafer technology, which promised higher profit margins but posed greater technical challenges [31][32] - The company invested $1.5 billion in the Mohawk Valley factory for 8-inch wafer production, but faced significant operational challenges and low utilization rates, leading to financial difficulties [39][42] Group 3: Financial Performance and Market Position - In 2024, Wolfspeed's revenue declined by 12%, and its stock price fell by 84.7%, marking it as one of the worst-performing tech stocks of the year [42][44] - The company's heavy debt burden from the 8-inch investment contrasted with the more efficient production strategies of Chinese competitors, who focused on 6-inch production [46][44] - As the EV market growth slowed in 2023, Wolfspeed's reliance on this sector became a critical vulnerability, ultimately leading to its bankruptcy filing [47][44]