Leading SiC companies worldwide are emerging, SICC Co., Ltd. (688234.SH) leads key semiconductor materials with "hard technology".

The leading company in the field of silicon carbide (SiC), SICC Co., Ltd. (688234.SH), is steadily progressing towards its Hong Kong IPO listing. Recently, SICC Co., Ltd. has been conducting its IPO roadshow, after passing the listing hearing at the Hong Kong Stock Exchange on July 30th. SICC Co., Ltd. (SICC) is a leading industry player in the global silicon carbide substrate market. Compared to traditional silicon-based devices, silicon carbide devices offer superior performance. In recent years, silicon carbide power semiconductor devices have seen rapid applications in emerging technology industries such as new energy vehicles, photovoltaic energy storage, AI glasses, and AI computing centers. With the upcoming listing of SICC Co., Ltd., the Hong Kong stock market will welcome another leading company in the "hard technology" sector. Focusing on rapid growth in the "hard technology" sector, aiming for global leadership SICC Co., Ltd. submitted its listing application to the Hong Kong Stock Exchange on February 24th this year, and on July 30th, the company passed the listing hearing at the Hong Kong Stock Exchange. Recently, SICC Co., Ltd. has begun its listing roadshow, with its Hong Kong listing imminent. SICC Co., Ltd. focuses on the field of silicon carbide, with its core product being silicon carbide substrates. Silicon carbide is a wide bandgap semiconductor material formed by the bonding of silicon (Si) and carbon (C) elements by covalent bonds, and it has become a "rising star" in the global materials science field in recent years. Established in November 2010, SICC Co., Ltd. has been dedicated to the research, production, and sales of silicon carbide single crystal substrates since its inception. The company went public on the Shanghai Stock Exchange's Sci-Tech Innovation Board in January 2022, making it the first listed company in China focusing on wide bandgap semiconductor materials. Since going public, SICC Co., Ltd. has experienced rapid development, with its market share quickly rising. According to a calculation by the authoritative industry research institution Fuji Economic Report, based on sales revenue, SICC Co., Ltd. is expected to hold a 22.8% market share in the silicon carbide substrate market by 2024, making it the world's second largest leading company behind only Wolfspeed. The company's brand and products have already gained significant recognition in the international market. From 2022 to 2024, SICC Co., Ltd.'s revenue increased from 417 million RMB to 1.768 billion RMB, with a growth rate far exceeding Wolfspeed. According to the aforementioned report, it is predicted that SICC Co., Ltd.'s market share will reach close to 26% in 2025, and the compound annual growth rate from 2023 to 2025 is expected to be as high as 96.75%, making it the fastest growing company in its sector. This means that it is just one step away from becoming the leader in the global sector. The reason why SICC Co., Ltd. has been able to maintain rapid growth is closely linked to its long-term technological accumulation. Currently, the company holds 503 patents, including 198 invention patents, ranking among the top 5 in the global silicon carbide industry in terms of related patents. With revolutionary breakthroughs in silicon carbide substrate material technology, SICC Co., Ltd. recently received the "gold award" in the "semiconductor electronic materials" category from the prestigious Japanese semiconductor media outlet "Electronic Device Industry News". This is the first time a Chinese company has won this award in its 31-year history, as well as the first time the highest honor has been given to silicon carbide substrate material technology, highlighting a significant breakthrough in China's semiconductor key basic materials field, demonstrating the country's leading position in the international arena of next-generation semiconductor materials technology. With its prominent "hard technology" attributes, the listing of SICC Co., Ltd. will add another leading company in the "hard technology" sector to the Hong Kong stock market. Deep cultivation of "key materials," clear technological advantages In the past, public understanding of chip performance mainly focused on its manufacturing process, especially the upgrade of the process. In reality, materials are also a crucial factor affecting chip performance. Traditional semiconductor products mainly use silicon-based materials for manufacturing, but after decades of technological expansion, the performance of silicon-based power devices has approached its limits. Compared to traditional materials, silicon carbide offers superior thermal conductivity, high-temperature resistance, and other performance advantages. The application of silicon carbide can significantly improve the overall efficiency of devices and reduce energy consumption, making it a key element in the future semiconductor "efficiency revolution." However, behind the excellent physical properties of silicon carbide lies a precision and extremely complex preparation process. The growth of silicon carbide single crystals needs to be carried out in a high-temperature, low-pressure, enclosed environment, and even tiny environmental changes can lead to lattice dislocations that affect the quality of the substrate material. Due to the high technical requirements, only a few companies globally have mastered the high-quality preparation technology of silicon carbide substrates. In this regard, SICC Co., Ltd. is currently in the forefront internationally thanks to its leading technological advantages. SICC Co., Ltd. has expertise in all stages of silicon carbide substrate production, including equipment design, heat field design, powder synthesis, crystal growth, substrate processing, and innovative materials quality characterization. Due to the rapid upgrade in end-market demand, the production of silicon carbide substrates in the market is still insufficient. On one hand, the global silicon carbide substrate industry is gradually developing towards larger sizes, with higher demands on the preparation process for larger substrates. On the other hand, due to long preparation cycles, high technical barriers, slow production expansion, and low effective production capacity, high-quality silicon carbide substrates are in short supply. Relying on its extensive technological expertise, SICC Co., Ltd. was the first to successfully produce 8-inch silicon carbide substrates with no macroscopic defects using a liquid phase method. The company has broken through the challenges in controlling the high-quality growth interface and defects of silicon carbide single crystals. Currently, SICC Co., Ltd. is one of the few companies worldwide to have achieved mass production of 8-inch silicon carbide substrates. Furthermore, in November 2024, SICC Co., Ltd. introduced the industry's first 12-inch silicon carbide substrates. This product not only increases the area available for chip manufacturing on a single wafer, significantly improving the yield of qualified chips, but also, under the same production conditions, can greatly increase production and lower unit costs, further enhancing economic benefits. In terms of production efficiency, SICC Co., Ltd. has always adhered to the business philosophy of "advanced, quality, and continuous improvement," continually strengthening its research and development, and consistently enhancing effective production capacity. Currently, SICC Co., Ltd.'s effective production capacity leads the industry, with the company having established two major silicon carbide semiconductor material production bases in Jinan, Shandong, and Shanghai Lingang Holdings. By 2024, the company's cumulative production capacity exceeded 400,000 pieces. As of now, the company has delivered over 1 million silicon carbide substrates. According to a report on the front page of Japan's "Industrial News" on July 18th this year, SICC Co., Ltd. has started supplying silicon carbide substrates to the Japanese market in bulk. The report also mentioned that SICC Co., Ltd. has plans to build factories overseas. These breakthroughs have enabled SICC Co., Ltd. to establish strong technological barriers, consolidate its leading position, and gradually transform its technological advantages into market advantages. Currently, over half of the top ten power device manufacturers globally are customers of SICC Co., Ltd., including international semiconductor giants such as Infineon, Bosch, and ON Semiconductor. In 2024, the company's foreign income reached 840 million RMB, a year-on-year increase of 104.43%, accounting for 47.53% of total revenue. This proportion is expected to continue to rise in the future. Vast application space, rapid market growth With its excellent performance, silicon carbide is already widely used in various fields such as new energy vehicles, photovoltaic energy storage, AI glasses, and more. Taking the field of new energy vehicles as an example, according to Frost & Sullivan data, the silicon carbide power device market in the new energy vehicle sector was valued at $2.31 billion in 2024, and is expected to increase to $14.69 billion by 2030, with a compound annual growth rate of 36.1% during this period. Additionally, silicon carbide power devices have shown strong growth in the fields of photovoltaic energy storage, power grids, and rail transportation, with projected compound annual growth rates reaching 27.2%, 24.5%, and 25.3% respectively in the forecast period. One of the fastest-growing markets is likely to be in emerging fields such as low-altitude economy, digital economy, and AI glasses. AI glasses are considered one of the most intelligent AI models with transformative potential, seen as the next "smart entrance" post-smartphone era, and many tech companies are accelerating their presence in this field. AI glasses, like smart glasses originally, are making their way into mainstream consumer life. This year has seen a significant increase in shipments of AI glasses. IDC data shows that in the first quarter of this year, the global smart glasses market saw shipments of 1.487 million units, an 82.3% year-on-year increase. IDC predicts that by 2025, global smart glasses shipments are expected to reach 14.518 million units, with the Chinese market estimated to have shipments of 2.907 million units, a 121.1% year-on-year increase. The rapid development of AI glasses is closely tied to the application of silicon carbide materials. Silicon carbide materials can be used in the optical waveguide lenses of AI glasses. Their refractive index is significantly higher than high-refractive index glass and lithium niobate, allowing for a broader field of view and a simpler full-color display structure, reducing the size, weight, manufacturing costs, and complexity of AI glasses, thus significantly enhancing the user experience. With its independently developed 300mm SiC seed crystal technology, SICC Co., Ltd. has successfully produced high-purity, conductive n-type and conductive p-type 300mm SiC crystals and substrates for AI glasses. In the future, as the shipments of AI glasses increase, SICC Co., Ltd.'s related products may see a surge in sales, becoming the second growth curve and boosting the company's strong performance. According to announcements, 70% of the funds raised in SICC Co., Ltd.'s Hong Kong listing will be used to expand the production capacity of 8-inch and larger silicon carbide substrates. With a focus on quality, SICC Co., Ltd. will enhance production efficiency through automation technologies and recruit production personnel to ensure delivery quality. Additionally, SICC Co., Ltd. will continue to invest in research and development beyond its current strong focus, using the raised funds to further improve research and development capabilities, enhance defect control and defect detection capabilities. Meanwhile, the company will accelerate the commercialization of 12-inch silicon carbide substrates and enrich its product portfolio. The combination of "hard technology" and a blue ocean market signifies broad growth potential, leading to significant institutional attention towards SICC Co., Ltd. As shown in the 2024 annual report, among the top 10 shareholders of SICC Co., Ltd., there are several public funds including the Huaxia Shanghai Stock Exchange Sci-Tech Innovation Board 50 ETF, E Fund Shanghai Stock Exchange Sci-Tech Innovation Board 50 ETF, and Jiashi Shanghai Stock Exchange Chip ETF, among others.