Propelled by the twin engines of the global energy transition and the computing power revolution, silicon carbide (SiC), with its exceptional physical properties—including high breakdown electric field, high thermal conductivity, and high electron saturation drift velocity—has become the ideal choice for power devices in new energy vehicles, photovoltaic energy storage, and AI data centers. In the first half of 2026, demand for SiC power devices was jointly lifted by AI computing buildouts, mass production of 800V high-voltage platform vehicles, and expanding optical storage installations. However, industry competition simultaneously intensified, with price wars continuing to spread, and several peers still mired in negative gross margins. Against this macroeconomic backdrop, BASICSEMI (09971), a leading domestic player in the silicon carbide power device sector, delivered its first financial report since its listing. In a cycle where the industry broadly faces gross margin challenges, BASICSEMI not only achieved steady revenue growth but also realized a historic leap in turning its gross margin positive, cementing its benchmark status in the SiC track.
Steady Revenue Growth, Gross Margin Crosses Critical Inflection Point
During the reporting period, the company's operating revenue increased by 15.5% year-on-year. The overall gross margin improved dramatically from -28.8% to 2.8%, a gain of 31.6 percentage points, marking a milestone of achieving positive gross margins in the SiC power device sector. Against a backdrop where the industry remains deeply entrenched in negative gross margins, the significance of this figure speaks for itself. The loss for the period narrowed by 8.8% year-on-year, while the adjusted net loss narrowed by 15.1%. This is not just a numerical improvement; it signals a substantive inflection point in the company's operational quality—validating a path to profitability improvement amid the intense price war in the SiC industry, setting a benchmark for the sector.
How was the gross margin turnaround achieved? The secret lies in the dual optimization of product mix and customer structure. A deep dive into the revenue structure changes reveals that BASICSEMI is proactively optimizing its product portfolio to navigate cyclical fluctuations across different market segments. During the reporting period, SiC discrete devices emerged as a new growth engine, with revenue from this segment rising to 21.6% of total revenue, up from 9.6% in the same period last year. Among these, SiC MOSFET revenue surged over 580% year-on-year, primarily driven by accelerated adoption in renewable energy, industrial applications, AI data centers, and consumer electronics. SiC power modules overall contributed 25.4% of total revenue. While revenue from automotive-grade modules declined due to price reductions and a strategic reduction in low-margin product sales, this proactive resource reallocation has yielded a revenue structure with higher profitability quality—industrial-grade modules experienced explosive growth, with revenue skyrocketing 2825.1% year-on-year during the period. Compared to automotive-grade products, industrial-grade modules require fewer chips and less packaging material, naturally exhibiting superior gross margins at comparable sales scales; their rapid ramp-up directly contributed to the overall gross margin improvement.
Simultaneously, the customer structure is undergoing positive changes. The company is actively selecting high-quality customers, expanding its customer base from a few key clients to a broader portfolio, making revenue sources more diversified and stable. On the upstream supply chain front, through centralized procurement negotiations, second-source supplier onboarding, and domestic substitution initiatives, procurement costs for epitaxial wafers and major materials have generally decreased, with some production consumables seeing cost reductions exceeding 30%. This cost control has provided strong support for gross margin improvement. The triple synergy of shifting product structure toward high-margin areas, diversifying the customer base, and continuously optimizing supply chain costs collectively pushed the gross margin above the breakeven point, validating the effectiveness and foresight of the company's "quality growth" strategy.
New Scenarios Unlock Growth Poles, Application Landscape Expands
If the gross margin turnaround represents BASICSEMI's "financial answer sheet," then its positioning in application scenarios outlines a longer-term growth narrative. AI data centers represent an explosive new scenario. AI computing demand is driving data center power supply architectures toward high-voltage DC upgrades, making SiC a "must-have" rather than an "option." During the reporting period, BASICSEMI's products were adopted in AI data centers of leading domestic telecom operators, supporting domestic substitution for intelligent computing clusters and green, low-carbon operations. Cumulative orders for industrial-grade SiC power modules in the electroplating power supply field have exceeded 30,000 units, with demand from renewable energy scenarios such as photovoltaics and energy storage continuing to rise.
The robotics sector represents the latest strategic move. At the 2026 World Robot Conference, BASICSEMI formally signed a strategic cooperation agreement with UBTECH, known as the "first stock of humanoid robots." The two parties will engage in deep collaboration on the application of SiC power devices in embodied intelligent humanoid robots, developing low-power, long-endurance solutions for scenarios including power management and motion control. Notably, BASICSEMI will deploy UBTECH humanoid robots in its own SiC production lines, co-building a demonstration production line for semiconductor manufacturing applications. This fusion paradigm of "third-generation semiconductors + embodied intelligence" not only opens new market space but also promises to feed back into manufacturing efficiency improvements.
Overseas markets are simultaneously breaking through. Automotive-grade SiC power modules have secured new design wins for overseas vehicle projects from a European Tier-1 supplier. An international leading electrical company's solid-state circuit breaker project, utilizing industrial-grade SiC power modules, has entered the testing and introduction phase. SiC discrete devices have also achieved batch shipments overseas for photovoltaic inverters.
Post-IPO Moves Unrelenting, Strategic Depth Takes Shape
Within less than two months of its listing, BASICSEMI's strategic pace has been compact and orderly. In terms of technology upgrades, less than a month after the IPO, the company announced a strategic cooperation with HANLEY TECH to accelerate the development and mass production of 8-inch SiC wafers. The industry is currently in a critical window for transitioning from 6-inch to 8-inch wafers—8-inch substrates offer a 78% larger area compared to 6-inch, increase the number of chips cut per wafer by 1.8 to 2 times, and reduce per-chip costs by 35%. Companies that secure an early position in the 8-inch track are poised to take the initiative in the next round of cost competition.
On the capital operations front, on the day of the results announcement (August 28), the company simultaneously convened an extraordinary general meeting, approving five special resolutions, including a general mandate for share buybacks, an H-share equity incentive plan, and a general mandate to issue H-shares, all passed unanimously. According to previous announcements, the company plans to repurchase up to 10% of its total issued H-shares during the mandate period, funded from internal resources, aiming to safeguard corporate value and shareholder interests. Concurrently, the H-share equity incentive plan is capped at 10% of total issued shares, designed to provide eligible participants with the opportunity to acquire equity interests in the company, incentivizing the core team to commit to enhancing long-term company value. The buyback signals value confidence to the market, while the incentive plan binds long-term interests for the team—running in parallel, both express management's confidence in the company's prospects and prepare organizational momentum for the transition from improved earnings quality to "sustained growth."
In Summary
The valuation logic of the SiC industry is undergoing profound reshaping—the market no longer pays a premium for mere expansion stories, and future valuation divergence will be more intense than ever. In this systemic shift, BASICSEMI has executed a precise "strategic recalibration": positioning for next-generation cost competition with 8-inch technology upgrades, building a profit foundation through industrial-grade market volume, and opening long-term space through batch deliveries in the automotive-grade market. The gross margin turning positive is the first milestone on this strategic path. It is particularly worth emphasizing that this interim report card was delivered under conditions where the company had not yet utilized its IPO proceeds—the team, in a phase with relatively constrained funding, has already achieved this critical gross margin inflection point through execution capability, which in itself is a powerful validation of the company's strategic resolve and operational capability. Once the IPO proceeds are fully deployed, capacity expansion, technology iteration, and global market development will receive even stronger resource support. As the industry sheds the froth of narratives, what will ultimately remain on valuation sheets are those enterprises with genuine cash-generating ability and strategic depth. What BASICSEMI has demonstrated is not just a viable path to growth driven by earnings quality—and this path is only just beginning.
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