Amidst the AI wave, the reshaping of the global energy landscape, upgrades in new energy vehicle power control systems, and accelerated construction of smart grids and microgrids in the 15th Five-Year Plan period, silicon carbide (SiC) is emerging as a key industrial material, recognized as the "optimal solution" for power semiconductors. The SiC epitaxy segment, serving as a crucial link in the SiC industry chain, has become a focal point of value due to its customisation attributes and high technical barriers. On March 30, 2026, EPIWORLD (02726), hailed as the "global first stock in SiC epitaxial wafers," debuted on the Hong Kong Stock Exchange, with its share price surging 36.06% on the first day of trading, pushing its market capitalisation past 49 billion yuan at one point. Data shows that EPIWORLD, the global leader in SiC epitaxial wafers, achieved a market share of 31.6% in 2024, with a gross margin exceeding its peers by over 12 percentage points. The company demonstrates comprehensive and robust competitive advantages and is one of the few enterprises that maintained profitability even during a downturn, indicating its emerging pricing power. In 2024, global sales of 8-inch equivalent traditional silicon epitaxial wafers reached approximately 80 million pieces, while annual sales of SiC epitaxial wafers, at just several hundred thousand pieces, signify the early stages of the SiC industry.
**SiC Power Semiconductors – The Ultimate Power Control Solution Under the AI Wave and Energy Reshaping** Driven by the artificial intelligence (AI) boom and geopolitical factors reshaping the energy landscape, the strategic value of electricity has been elevated to an unprecedented level. Many industry leaders, including Elon Musk, believe the "Watt" unit of power could become the ultimate anchor for currency. In fact, in current and future human society, almost every watt of electricity applied relies on the transmission and regulation of power semiconductor chips. Silicon carbide (SiC), as a versatile "all-rounder," has become the best power semiconductor material for efficient electrical energy conversion and control, thanks to its exceptional physical properties: high voltage resistance, high-temperature tolerance, high frequency, low loss, and high thermal conductivity.
1. **The "Intelligent Heart" of AI Computing Centers**: The global energy crisis has led to soaring electricity prices, placing immense cost pressure on high-energy-consumption AI data centers. Power Usage Effectiveness (PUE) has become a core competitive factor in the AI computing industry. SiC power semiconductors can significantly improve the power conversion efficiency of AI computing centers (reducing heat dissipation and losses) while enhancing system reliability. Consequently, 800V high-voltage direct current (HVDC) and solid-state transformer (SST) solutions using SiC power semiconductors as core components have become essential. In the near future, the AI power industry chain is expected to exceed the trillion-yuan level. As a necessary component and core part of this chain, SiC power semiconductors will directly benefit from the rise of the AI wave.
2. **The "Electric Heart" of New-Generation Transportation**: Against the backdrop of escalating geopolitical conflicts and long-term uncertainty in Gulf oil supplies, global transportation is rapidly transitioning to electrification. SiC power semiconductors represent the optimal power semiconductor (power electronics) solution for new-generation vehicles like new energy vehicles, high-speed rail, electric ships, and electric aircraft. They significantly enhance vehicle performance and charging experience; for example, 1000V platform SiC flash charging technology enables "400 km of range with a 5-minute charge" while effectively reducing energy consumption and increasing driving range. SiC semiconductors are the best solution necessary for rapid energy replenishment in new-generation transportation.
3. **The "Efficiency Engine" of New Power Systems**: To ensure energy security and independence, major global economies are vigorously building new power systems based on renewable energy. China is planning a substantial increase in power grid construction investment, expected to reach approximately 5 trillion yuan during the 15th Five-Year Plan period, far exceeding the 2.85 trillion yuan investment during the 14th Five-Year Plan. This initiative has spawned huge demand for core power electronic components that can improve power generation, transmission, and storage efficiency. Leveraging its high voltage resistance, high-temperature tolerance, energy efficiency, and recoverability after avalanche breakdown, SiC power semiconductors have become the best power semiconductor (power electronics) solution for new-generation grid and energy storage applications like smart grids, photovoltaics, wind power, and energy storage infrastructure.
4. **The "Robust Power Source" for the Commercial Space Age**: The commercial space age, represented by SpaceX, has begun. The extreme environment of space poses severe challenges to the power density, heat dissipation, heat resistance, and radiation tolerance of power electronic components. SiC material perfectly matches space environment requirements due to its excellent thermal dissipation, heat resistance, and radiation resistance. Specifically: a) For heat dissipation, SiC's thermal conductivity is over three times that of silicon, meaning SiC chips can dissipate heat rapidly. b) For heat resistance, high-power silicon devices fail completely at 125°C, whereas SiC power devices can operate normally in environments far exceeding 200°C; NASA has pushed the operating temperature of SiC JFETs beyond 800°C. c) For radiation resistance, SiC is an "all-round champion" against gamma/X-ray total dose, proton/neutron displacement damage, cosmic rays, and high-temperature radiation, making it the mandatory choice for space irradiation scenarios.
**Specialisation – An Inevitable Trend in the SiC Power Semiconductor Industry** The move towards specialisation in the SiC power semiconductor industry is an inevitable outcome of technological evolution and market development, a trend now clearly visible. 1. The global SiC power device market is expanding rapidly at a compound annual growth rate (CAGR) of 20%-35%, with the global market size projected to exceed $115 billion by 2035, about half of which will be the SiC epitaxial wafer (substrate + epitaxy) market. As demand explodes across multiple trillion-yuan industries, the trend towards specialisation in the SiC power semiconductor industry is becoming more pronounced. Leading companies in various segments are achieving economies of scale by focusing on their areas of expertise, significantly improving production efficiency and substantially reducing unit costs. Global SiC chip IDM giants are also increasingly outsourcing their additional SiC epitaxial wafer needs to specialised epitaxy partners capable of stably providing high-quality, customised products, to maintain the competitiveness of their chip products. This overall development trend aligns with the consolidation trend seen historically in the silicon semiconductor industry. Since epitaxy largely determines the performance and stability of SiC devices, its value share within the entire industry chain is expected to increase further as SiC products penetrate more high-end applications (like smart grids and rail transit). The history of the silicon industry provides a clear reference. In the late 1980s, driven by soaring technical complexity and costs under Moore's Law, the semiconductor industry shifted from the vertically integrated (IDM) model to specialisation in design, manufacturing, and packaging/testing, with the founding of TSMC as a key milestone. This shift gave rise to design giants like NVIDIA and AMD and manufacturing leaders like TSMC and Samsung, increasing overall industry R&D efficiency by 40% and shortening product iteration cycles to within 18 months, ultimately fostering the prosperity of the global semiconductor industry. During this process, most companies, including many silicon power device manufacturers, turned to outsourcing epitaxial wafer foundry services. While silicon semiconductor devices might not require epitaxy, all SiC semiconductor devices depend on customised epitaxial production. The 2024 global sales of 80 million 8-inch equivalent silicon epitaxial wafers contrast with the current annual demand for only several hundred thousand SiC epitaxial wafers, indicating the vast growth potential in the early stages of the SiC industry.
2. The SiC industry chain already shows a clear trend of specialisation. Over a decade ago, due to the absence of independent, highly competitive third-party epitaxial wafer suppliers, the SiC industry chain was dominated by the IDM-plus-materials model, exemplified by the US's Wolfspeed. As the industry developed, specialised manufacturers focusing on specific segments began to rise. Most of the over ten substrate manufacturers have adopted business models focused on substrates; Chinese specialised substrate manufacturers' market share in 8-inch wafers has significantly surpassed that of IDM companies supplying their own substrates. In the epitaxy segment, specialised manufacturers like China's EPIWORLD, Japan's Resonac, and the US's Coherent have collectively captured over 55% of the total epitaxy market. Regarding devices, the vast majority of Chinese device manufacturers purchase epitaxial wafers externally. To enhance competitiveness, some major international IDMs have begun transferring their epitaxy equipment at low prices, reducing in-house epitaxy production and increasing external procurement. Evidently, the deepening specialisation trend is rapidly enhancing the scale and synergistic efficiency of the industry chain, propelling SiC from a "niche high-end" material towards "mass adoption."
**Customised SiC Epitaxial Wafers – The Value Hub of SiC Power Semiconductors** Within the SiC power semiconductor industry chain of "substrate-epitaxy-chip," the epitaxial growth process plays a pivotal connecting role. It is the core link determining the final device's performance and reliability and a key focal point of value. 1. **Epitaxy Quality Determines Device Performance**: SiC power devices are fabricated within the epitaxial layer. As the functional layer of the device, the quality of the epitaxial layer directly determines the final performance and reliability of the power device. Unlike integrated circuit chips, where the main challenge lies in the chip fabrication process, power semiconductor chips must directly withstand high voltages and large currents. Therefore, one of the core process challenges lies in the structural precision and quality control of the epitaxial layer material.
2. **Customised Epitaxy vs. Standardised Substrates**: Substrates, serving as the base for chips, can be graded into different tiers of standard products based on quality. Furthermore, with the very low cost (under $100,000) of crystal growth furnaces for substrate production, many companies have entered the substrate market. In contrast, the epitaxial layer, as the functional area of the chip, requires customised production of its structure and parameters according to each customer's chip design, placing extremely high demands on the manufacturer's process capability and customer responsiveness. Moreover, unlike first-generation silicon semiconductors, which can be used for device manufacturing without epitaxy, every SiC substrate must undergo customised, proprietary epitaxial structure production by an epitaxy company based on the client's design before various SiC power and optical devices can be manufactured. Such customised epitaxial products must meet no fewer than 15 specific parameter indicators. Failure to meet any single custom requirement renders the product defective.
3. **Yield Determines Profitability**: The key factor determining the profitability of an SiC epitaxy company is product yield. Since all epitaxial wafers are customer-specific custom products, the ability to deliver products meeting increasingly stringent customer specifications is only one aspect; more critically, it is the proportion of produced wafers that satisfy these specific custom requirements. Leading technology, excellent management, combined with stable core technology and teams are crucial determinants of yield. Companies with low yield competitiveness may incur greater losses as sales volume increases.
**Analysis of the Leader's Moat – A Future Star Under the AI Wave and Energy Reshaping** As a typical semiconductor sector, the core value of companies in SiC epitaxy relies on technological advantage, customer base advantage, and market share advantage. A comprehensive comparison indicates that EPIWORLD possesses robust and comprehensive competitive advantages, positioning it as a potential future star under the AI wave and energy restructuring. 1. **Deep Technical Barriers and Industry Recognition**: The founder of EPIWORLD is a globally renowned SiC semiconductor scientist with over 35 years of experience in SiC semiconductor research and industrialisation, being the world's first IEEE Fellow in SiC. EPIWORLD represents his second successful venture. The company is the first and currently only lead drafter of international industry standards for SiC epitaxy and is also the first and only company globally to have mastered 12-inch SiC epitaxial wafer technology, leading the development of the global 12-inch industry chain. A 12-inch wafer yields 4.4 times more chips than a 6-inch wafer and 2.3 times more than an 8-inch wafer, significantly enhancing competitiveness.
2. **Global Leading Market Share**: According to 2024 data, EPIWORLD holds the top global market share at 31.6%, leading the second-place player, Japan's Resonac (19.4%), by over 12 percentage points, solidifying its leading position.
3. **Top-Tier Customer Quality**: EPIWORLD supplies 8 out of the global top 10 SiC chip companies, indicating significantly superior customer quality compared to peers.
4. **Outstanding Profitability**: 2024 financial data shows EPIWORLD achieved a gross margin of 34.1%, compared to only 22.4% for Japan's Resonac. Comparing financial data across companies reveals that EPIWORLD's product pricing power is beginning to materialise. Even during the 2025 inventory destocking cycle with lower capacity utilisation, a period when other peers faced significant loss pressures, EPIWORLD maintained a gross margin of 25.6% and remained profitable. With strengthening technical barriers and increasing economies of scale, EPIWORLD's profitability advantage is expected to further intensify.
5. **Strong Financial Position**: According to public data, EPIWORLD's RMB cash and cash equivalents increased from 270 million yuan in 2022 to 1.83 billion yuan as of the end of September 2025. Over the nearly five years from the start of profitability in 2021 to September 2025, net cash flow from operating activities amounted to approximately 1.4 billion yuan. Actual net profit, excluding share-based compensation expenses, was 20 million yuan, 172 million yuan, 378 million yuan, 321 million yuan, and (forecast) 178 million yuan respectively, totaling about 1.07 billion yuan. This equates to the total five-year profit achieved through an average annual profit growth of 137% since 2021. Net assets grew from 580 million yuan to 2.98 billion yuan, while total assets increased from 1.45 billion yuan to 4.37 billion yuan. On this foundation, augmented by the recently completed HKD 1.64 billion financing, EPIWORLD's financial reserves continue to strengthen.
**Conclusion** Whether for AI computing centers, energy storage systems, high-voltage smart grids, new energy vehicles, various new-generation electric transportation, or the commercial space age, SiC power semiconductors are already acknowledged as essential components and the "energy heart." More notably, all these markets are in rapid development phases and are beginning to release sustained, scaled demand. New massive markets are developing at a pace exceeding expectations. Among them, demand for SiC power semiconductors from the AI computing industry is projected to experience explosive growth by 2027. During the 15th Five-Year Plan period, national grid investment will reach 5 trillion yuan, with smart grid construction being a key focus, which will generate substantial demand for high-value, high-voltage SiC epitaxial wafers. Benefiting from exploding downstream demand and deepening industry specialisation, the epitaxy segment – the value hub of the SiC industry chain – is entering a golden era of rapid development. With leading technology and yield, the top global market share, substantial financial reserves, a top-tier customer ecosystem, and cycle-defying profitability, EPIWORLD, as the global leader in SiC epitaxy, is anchoring the industry's development course and emerging as the most certain future star in the power semiconductor industry, driven by the dual engines of AI and energy.
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