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 - Basic Semiconductor is the only company in China that integrates silicon carbide (SiC) chip design, wafer manufacturing, module packaging, and gate driver design and testing capabilities, and is preparing for an IPO in Hong Kong [1][12]. Company Overview - Basic Semiconductor was founded in 2016 and is led by a team of highly educated individuals, including founder Wang Zhihan, who achieved top scores in the physics section of the Guangdong provincial college entrance examination at age 17 and later earned a PhD from Cambridge University [1][5][4]. - The company's main products include SiC discrete devices, SiC power modules, and power semiconductor gate drivers [1]. Financial Performance - From 2022 to 2024, Basic Semiconductor reported total revenues of approximately 650 million RMB, but incurred total losses exceeding 800 million RMB [1]. - The revenue for the years 2022, 2023, and 2024 was 117 million RMB, 221 million RMB, and 299 million RMB, respectively, reflecting a compound annual growth rate (CAGR) of 59.9% [15]. - The revenue from SiC power modules specifically was 5.05 million RMB, 77.03 million RMB, and 146.57 million RMB for the same years, with a staggering CAGR of 434.3% [15]. Market Position and Product Development - Basic Semiconductor is recognized as a leading player in the SiC power device market, particularly in the electric vehicle sector, having secured design-in agreements with over 50 models from various automotive manufacturers [18]. - The company operates a wafer fab in Shenzhen and a packaging line in Wuxi, with plans to expand packaging capacity in Shenzhen and Zhongshan [14]. Investment and Valuation - Basic Semiconductor has undergone multiple rounds of financing, achieving a post-money valuation exceeding 5.1 billion RMB as of April 2023 [12]. - The latest round of financing included investments from state-owned enterprises in Zhongshan, indicating strong institutional support [12]. Challenges and Future Outlook - Despite significant revenue growth, Basic Semiconductor has not yet achieved profitability, with gross margins for SiC power modules reported at -75.5%, -66.0%, and -27.9% for the years 2022 to 2024 [18]. - The company anticipates continued net losses in the short term due to ongoing investments in research and development and business expansion [18].

Core Viewpoint - The semiconductor industry is shifting towards third-generation semiconductors, particularly silicon carbide (SiC), which is being widely adopted in high-voltage and high-current applications such as electric vehicles and renewable energy systems [1][2]. Group 1: Industry Trends - The market for third-generation semiconductor materials is experiencing significant growth, driven by the superior properties of SiC, including high breakdown electric field strength, high thermal conductivity, and wide bandgap [1]. - The global market for SiC discrete devices is expected to grow at a compound annual growth rate (CAGR) of 32.2% from 2020 to 2024, with sales revenue projected to increase from 1.6 billion to 5 billion [6]. - The Chinese market for SiC discrete devices is anticipated to grow at a CAGR of 65.4% from 2020 to 2024, with sales revenue expected to rise from 0.3 billion to 1.9 billion, contributing 38.4% to the global market by 2024 [6]. Group 2: Company Overview - Shenzhen Basic Semiconductor Co., Ltd., a leading Chinese company in the SiC chip sector, has submitted its listing application to the Hong Kong Stock Exchange, backed by major securities firms [2][3]. - Established in 2016 by a team of PhDs from Tsinghua University and the University of Cambridge, the company focuses on the research, development, manufacturing, and sales of SiC power devices [2]. - Basic Semiconductor is the only domestic company that integrates SiC chip design, wafer manufacturing, module packaging, and gate driver design and testing capabilities, achieving mass production across all segments [2]. Group 3: Financial Performance - Basic Semiconductor reported revenues of approximately 0.117 billion, 0.221 billion, and 0.299 billion from 2022 to 2024, showing significant year-on-year growth [5]. - The company incurred losses of approximately 0.242 billion, 0.342 billion, and 0.237 billion during the same period, totaling a cumulative loss of 0.821 billion [5]. - Research and development expenses increased from 0.059 billion in 2022 to 0.091 billion in 2024, reflecting the company's commitment to innovation despite ongoing losses [5]. Group 4: Market Position and Challenges - Basic Semiconductor ranks seventh globally and sixth in China in the SiC power module market by revenue as of 2024, positioning itself as a significant player in the domestic third-generation semiconductor sector [4]. - The company faces challenges due to the capital-intensive nature of the semiconductor industry, with rising financing costs and long return cycles impacting cash flow [11]. - Despite the high volatility and long cycles associated with the industry, Basic Semiconductor's potential for long-term growth remains strong, particularly if it successfully capitalizes on technological advancements [11].

Core Viewpoint - Basic Semiconductor has officially submitted its listing application to the Hong Kong Stock Exchange, positioning itself as a leading player in China's third-generation semiconductor power device industry, focusing on the research, manufacturing, and sales of silicon carbide power devices [2] Company Overview - Basic Semiconductor is the only company in China that integrates silicon carbide chip design, wafer manufacturing, module packaging, and gate driver design and testing capabilities [2] - The company has established a comprehensive product portfolio, including silicon carbide discrete devices, automotive-grade and industrial-grade silicon carbide power modules, and power semiconductor gate drivers [2][5] Market Position - According to Frost & Sullivan, Basic Semiconductor ranks seventh globally and sixth in China in the silicon carbide power module market by revenue for 2024, and third among Chinese companies [2] - The company has achieved significant sales growth, with revenue increasing from RMB 116.9 million in 2022 to RMB 220.6 million in 2023, and projected to reach RMB 299 million in 2024 [7] Product Applications - Basic Semiconductor's solutions serve various industries, including electric vehicles, renewable energy systems, energy storage systems, industrial control, data centers, and rail transportation [2] - The company has delivered over 90,000 units of its products for electric vehicle applications as of December 31, 2024, with sales of silicon carbide power modules increasing from over 500 units in 2022 to over 30,000 units in 2023, and further to over 61,000 units in 2024 [7] Technological Advancements - Basic Semiconductor holds 163 patents and has submitted 122 patent applications, with core product performance reaching international benchmark levels [5] - The company has established a research and development center in collaboration with Tsinghua University and has been recognized as a collaborative innovation center for third-generation semiconductors [5] Business Model - Basic Semiconductor operates under an IDM (Integrated Device Manufacturer) model, covering the entire value chain from silicon carbide chip design to wafer production and module packaging, with all processes achieving mass production [6] - The company plans to expand its packaging capacity in Shenzhen and Zhongshan, aiming to achieve significant supply chain and cost advantages [6]

Core Viewpoint - Shenzhen Basic Semiconductor Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, aiming to capitalize on its position in the silicon carbide power module market, where it ranks seventh globally and sixth in China based on projected 2024 revenue [1][4]. Company Overview - Basic Semiconductor is a leading enterprise in China's third-generation semiconductor power device industry, focusing on the research, manufacturing, and sales of silicon carbide power devices [4]. - The company is the only one in China that integrates silicon carbide chip design, wafer manufacturing, module packaging, and gate driver design and testing capabilities [4][5]. - Basic Semiconductor is among the first in China to mass-produce and deliver silicon carbide solutions for electric vehicles, which is the largest end-use market for silicon carbide semiconductors [4]. Product and Market Position - The company has established a comprehensive product portfolio, including silicon carbide discrete devices, automotive-grade and industrial-grade silicon carbide power modules, and power semiconductor gate drivers [4]. - Basic Semiconductor serves various industries, including electric vehicles, renewable energy systems, energy storage systems, industrial control, data centers, and rail transportation [4]. - The company has built high entry barriers and long-term partnerships with customers, achieving design-in with over 50 models from more than 10 automotive manufacturers [4]. Financial Performance - Basic Semiconductor's revenue for the fiscal years 2022, 2023, and 2024 was approximately RMB 117 million, RMB 221 million, and RMB 299 million, respectively [6][9]. - The company reported losses of approximately RMB 242 million, RMB 342 million, and RMB 237 million for the same periods [6][9]. - The sales volume of silicon carbide power modules increased significantly from over 500 units in 2022 to over 30,000 units in 2023, and is projected to exceed 61,000 units in 2024 [6]. Market Growth - The global silicon carbide power device market is expected to grow from RMB 4.5 billion in 2020 to RMB 22.7 billion in 2024, with a compound annual growth rate (CAGR) of 49.8% [6]. - The penetration rate of silicon carbide in the global power device market is projected to rise from 1.4% in 2020 to 6.5% in 2024, and further to 20.1% by 2029 [6].