大中华区科技半导体-评估碳化硅衬底的看涨理由-Greater China Technology Semiconductors-Assessing the bull case for SiC substrates

Summary of Conference Call Notes Industry Overview - Industry: Silicon Carbide (SiC) Substrates - Key Players: SICC, Infineon, Bosch, On Semi, Meta, Google Core Insights and Arguments 1. TAM Opportunities: The Total Addressable Market (TAM) for SiC substrates is expected to grow due to advancements in AR glass and AI data centers, with a projected TAM of US$44 million in 2027, representing 4% of the SiC substrate market valued at US$1.1 billion in 2024 [3][5] 2. AR Glass Growth: Meta's upcoming launch of AR glass Hypernova and Google's Aura project are anticipated to drive demand for SiC substrates, although current high costs and low yields hinder widespread adoption [3][11] 3. AI Data Centers: SiC devices are projected to play a crucial role in power conversion for AI data centers, with an initial TAM addition of ~1% in 2027, potentially increasing to ~20% by 2030 as 800V adoption rises [3][16] 4. China's Competitive Position: Chinese SiC substrate vendors, particularly SICC, are better positioned than local device makers due to their role in the supply chain for AR glass and AI data centers [4][5] 5. Financial Projections: SICC's bull case price target has been raised by 23% to Rmb104.4, with expectations of revenue contributions from AR glass and AI data centers adding 3% and 1% respectively by 2027 [5][24] Additional Important Insights 1. Cost and Yield Challenges: The high cost of SiC substrates (approximately US$1,600 for an 8-inch substrate) and low yield rates are significant barriers to adoption in AR applications [9][20] 2. Supply Chain Collaborations: SICC is actively collaborating with supply chain partners to promote SiC substrate applications in AR glasses and EV displays, indicating a strategic approach to market penetration [10] 3. Market Share Dynamics: China's SiC substrate vendors held a 36% global market share in 2024, with SICC supplying wafers to major industry players [4] 4. Revenue Growth Expectations: SICC's revenue is projected to grow at a CAGR of over 25% from 2024 to 2027, with gross margins expected to improve to over 35% by 2027 [24][34] 5. Valuation Methodology: The valuation for SICC is based on a P/B multiple of 5.4x for the base case, reflecting the average since its listing in January 2022, with a bear case at Rmb49.7 and a bull case at Rmb104.4 [31][41] Financial Performance Highlights - Quarterly Revenues: Total revenues for SICC are projected to be Rmb1,768 million in 2024, with a slight decline expected in 2025 before recovering to Rmb2,442 million by 2027 [30][49] - Gross Margin Trends: Gross margins are expected to fluctuate, with a notable increase anticipated by 2027 [30][49] - Operating Income: Operating income is projected to improve significantly by 2027, reflecting operational efficiencies and market share gains [30][49] This summary encapsulates the key points from the conference call, focusing on the SiC substrate industry, SICC's market position, financial projections, and the challenges and opportunities ahead.