As capital markets rebound, semiconductor firms are flocking to the Hong Kong Stock Exchange. Recently, Shenzhen Basic Semiconductor Co., Ltd. (Basic Semiconductor) submitted its listing application to the HKEX, with CITIC Securities, Guojin Securities (Hong Kong), and BOCI acting as joint sponsors.
Founded in 2016, Basic Semiconductor specializes in silicon carbide (SiC) power devices, offering products such as SiC discrete devices, SiC power modules, and gate drivers for power semiconductors, catering to industries like new energy vehicles (NEVs) and photovoltaic energy storage.
Despite the booming semiconductor sector—exemplified by Moore Thread's 400% stock surge on its A-share debut on December 5—Basic Semiconductor remains unprofitable. Over the past three and a half years, the company has accumulated losses of approximately RMB1 billion.
After its initial IPO filing lapsed, can Basic Semiconductor succeed this time?
**1. RMB1 Billion Loss in 3.5 Years, CEO Compensation Exceeds RMB50 Million** Before founding Basic Semiconductor, Wang Zhihan established Bronze Sword Technology in 2009. In 2016, Bronze Sword partnered with Sweden’s Ascatron AB to launch Basic Semiconductor, each holding a 50% stake.
Wang, an electrical engineering graduate from Tsinghua University with postdoctoral experience at Cambridge, combined his technical expertise with Ascatron’s SiC material manufacturing capabilities to position Basic Semiconductor for growth.
The company focuses on SiC semiconductor applications, developing and mass-producing SiC discrete devices and power modules. In 2020, it integrated Bronze Sword’s gate driver business, launching gate driver boards.
Today, Basic Semiconductor boasts full in-house capabilities from wafer fabrication to module packaging and gate driver design, serving NEVs, renewable energy, and energy storage sectors. NEVs represent the largest end-market for SiC semiconductors.
Despite strong NEV growth—global SiC power device markets expanded from RMB4.5 billion in 2020 to RMB22.7 billion in 2024, with projections reaching RMB110.6 billion by 2029—Basic Semiconductor holds just a 2.9% share in China’s SiC power module market.
From 2022 to H1 2025, the company reported revenues of RMB117 million, RMB221 million, RMB299 million, and RMB104 million, respectively. However, net losses totaled RMB242 million, RMB342 million, RMB237 million, and RMB177 million, accumulating to RMB998 million. Adjusted net losses (non-IFRS) stood at RMB190 million, RMB331 million, RMB203 million, and RMB132 million.
Basic Semiconductor attributes losses to R&D and market expansion costs, with product pricing below mature international competitors. Yet, CEO Wang Zhihan drew over RMB50 million in compensation during this period, including RMB38 million in 2022 alone—10x the pay of CEO He Weiwei.
**2. Loss-Making Sales Fail to Retain Customers** Basic Semiconductor’s revenue growth relies heavily on top clients, which contributed 32.2%, 46.4%, 63.1%, and 58.0% of sales from 2022 to H1 2025. Despite efforts to expand globally—including a Nagoya R&D center—overseas presence remains minimal, with only one Korean client briefly appearing among top customers.
Customer retention rates are declining: renewable energy/industrial clients dropped from 56.2% in 2022 to 53.7% in H1 2025, while automotive electronics clients fell from 66.7% in 2023 to 21.4% in H1 2025.
This attrition persists despite drastic price cuts. SiC discrete devices fell from RMB4.5/unit to RMB3.7/unit, while SiC power modules plunged from RMB9,871.2/unit to RMB1,821/unit—near industry floor prices. Gross loss margins reached 96–194% for discrete devices and 27–76% for power modules.
Basic Semiconductor cites market competition and generational product transitions for pricing pressures, with Frost & Sullivan predicting further SiC price declines.
**3. Wingtech and GAC Backing, Yet RMB200M+ Short-Term Funding Gap** Pre-IPO, Basic Semiconductor raised RMB1.032 billion across 12 funding rounds, backed by Wingtech (parent of Nexperia), Bosch, GAC Group, and state-owned investors. Its post-D-round valuation hit RMB5.16 billion.
However, frequent shareholder exits—including Ascatron AB and others—raise questions. CEO Wang also signed redemption-right agreements with investors, contingent on IPO success. A 2019 deal with two Nanjing investors mandates share repurchases at 8% annual interest if listing conditions aren’t met by December 31, 2025.
As of October 31, 2025, Basic Semiconductor held just RMB365.77 million in cash against RMB311 million in short-term debt—a RMB274 million gap underscoring urgent funding needs.
Without a clear path to profitability, the company faces steep challenges in winning investor confidence.
*Cover image source: VRock via licensing agreement.*
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