Core Viewpoint - The silicon carbide (SiC) power device sector is experiencing a boom driven by the growth of the electric vehicle and renewable energy industries, as evidenced by the IPO plans of Shenzhen Basic Semiconductor Co., Ltd. [2] Company Overview - Shenzhen Basic Semiconductor, founded by a team of top PhDs and backed by prominent investors like Bosch and Wingtech Technology, is characterized by high growth alongside ongoing losses [3][4]. - The company has raised over 1 billion RMB through multiple financing rounds, achieving a valuation of 5.16 billion RMB after its D round in August [4]. Shareholding Structure - The founder, Wang Zhihan, holds 45.98% of the shares, making him the controlling shareholder, while Wingtech Technology, Bosch Venture Capital, and GAC Capital hold 3.67%, 2.18%, and 1.5% respectively [5]. Market Position and Product Offering - Basic Semiconductor is one of the few IDM companies in China that has achieved full-process independent production of SiC chips, including design, wafer manufacturing, module packaging, and driver design [6]. - The product line includes SiC discrete devices, automotive-grade and industrial-grade SiC power modules, and gate drivers, with applications in high-growth sectors such as electric vehicles and renewable energy [6][8]. - The company has successfully entered the supply chains of over 10 automotive manufacturers, with shipments of over 110,000 units for electric vehicle products expected by June 2025 [8]. Industry Growth and Financial Performance - The global SiC power device market is projected to grow from 4.5 billion RMB in 2020 to 22.7 billion RMB by 2024, with a compound annual growth rate (CAGR) of 49.8% [9]. - The domestic market is expected to reach 42.8 billion RMB by 2029, with a CAGR of 47.1% from 2025 to 2029 [9]. - Despite revenue growth from 117 million RMB in 2022 to 299 million RMB in 2024, the company has faced significant losses, totaling over 800 million RMB from 2022 to 2024, with a net loss of 177 million RMB in the first half of 2025 [10]. Profitability Challenges - The company has struggled with profitability, with a gross loss margin of 40.8% for SiC power modules in the first half of 2025, primarily due to high raw material costs and increased market competition [11][12]. - Although the overall gross loss margin improved from 48.5% in 2022 to 9.7% in 2024, it rose again to 28.8% in the first half of 2025, indicating volatility in profitability [12]. Customer Retention and Revenue Concentration - Customer retention rates have shown significant fluctuations, particularly in the renewable energy and industrial application sectors, with retention rates of 53.7% and 71.1% respectively in the first half of 2025 [13]. - The top five customers contributed 58% of the company's revenue in the first half of 2025, indicating a high concentration of revenue sources and associated operational risks [14]. Conclusion - Basic Semiconductor has established a strong position in the domestic SiC market with its IDM capabilities and technical expertise, supported by significant investments from industry leaders [14]. - However, the company faces critical challenges in achieving profitability amidst rising competition and fluctuating customer retention, which will be crucial for its upcoming IPO and future growth [14].