IPO Outlook | Will Hantian Success increase investment to prepare for the competition in 8-inch wafer production, and can the new global leader's layout change its performance?

Benefiting from the growth of industries such as new energy vehicles, photovoltaic energy storage, data centers, and even AR glasses, the silicon carbide market has expanded rapidly in recent years. It is understood that due to its outstanding advantages such as wide band gap, high thermal conductivity, high breakdown field strength, and high electron saturation velocity, silicon carbide can achieve efficient, high-speed, and stable power control and processing within a wide temperature range, and is regarded as the "smart heart" supporting the use of electricity in various power systems. Data shows that the sales of the global silicon carbide power semiconductor device industry will reach $2.6 billion in 2024, with a compound annual growth rate of 45.4% from 2020 to 2024; by 2029, the market capacity is expected to further expand to $13.6 billion. Correspondingly, the penetration rate of global silicon carbide power semiconductor devices in the global power semiconductor market will also increase from 4.9% in 2024 to 17.1% in 2029. With the rapid development of the entire industry chain, the "golden content" of the intermediate links is naturally also rising. Take silicon carbide epitaxial wafers as an example, as the cornerstone connecting innovative raw materials and high-performance devices, the quality of silicon carbide epitaxial wafers is crucial, with the epitaxial layer manufacturing value accounting for about 25% of the entire value chain of silicon carbide power devices. In 2024, the global sales of silicon carbide epitaxial wafers reached $1.2 billion, and it is expected to increase to $5.8 billion by 2029 with a compound annual growth rate of 38.2%. Taking advantage of the high-speed development of the industry, global silicon carbide epitaxy industry leader Han Tiancheng Electronics Technology (Xiamen) Co., Ltd. ("Han Tiancheng") has also stepped up its business volume in the past few years. However, it is quite intriguing that Han Tiancheng's performance does not show linear changes, but shows a certain degree of fluctuation. GMTEight noted that after failing to debut on the A-share market in the past, Han Tiancheng recently submitted documents to the Hong Kong Stock Exchange once again, demonstrating a strong desire to achieve its dream of entering the capital market. Performance fluctuations Founded in 2011, Han Tiancheng has established a strong market position in the global market as a leading global silicon carbide epitaxy foundry. According to data from Zhaoshi Consulting, Han Tiancheng occupied 31.6% and 29.2% of the global market share in terms of sales and revenue in 2024, respectively, ranking first globally. Behind its outstanding market position is Han Tiancheng's continuous leadership in driving industry innovation. It is reported that Han Tiancheng is the first domestic manufacturer to achieve commercial batch supply of 3-inch, 4-inch, 6-inch, and 8-inch silicon carbide epitaxial wafers, and the first globally to achieve large-scale outsourcing of 8-inch epitaxial wafers. In addition, the company also took the lead in drafting and formulating the world's first and currently only international SEMI standard for silicon carbide epitaxy. According to the prospectus, Han Tiancheng's revenue mainly comes from wafer sales and wafer foundry services. Data shows that Han Tiancheng's total revenue for 2022-2024 was $441 million, $1.143 billion, and $974 million respectively, and the total revenue for the first 5 months of 2025 was $266 million, compared to $381 million in the same period last year. The trend of revenue changes shows an increase followed by a decrease. Looking at the revenue structure, wafer sales have always been the company's largest source of revenue, accounting for 63%, 74.2%, 86.2%, and 86.4% of the total revenue over the above period, showing an increasing trend year by year. In contrast, the volume of Han Tiancheng's wafer foundry services continued to shrink during the reporting period, accounting for less than 7% in the first 5 months of this year. It is worth noting that since the beginning of this year, Han Tiancheng's revenue from other businesses, including silicon carbide substrate sales, has expanded significantly, with the revenue share in the first 5 months increasing from 1.7% in the same period last year to 6.7% this year. In addition to the trend of revenue growth, another point worth noting is that Han Tiancheng's domestic sales proportion has returned to a high level. From 2022 to the first 5 months of 2025, the company's revenue share from the European region was 33.9%, 28.3%, 27.6%, and 12% respectively. During the same period, Han Tiancheng's revenue share from Asia was 62.5%, 65.2%, 69%, and 83.6% respectively. The revenue share from the Greater China region decreased from 38.1% in 2022 to 21.3% in 2024, but increased again to 37.1% in the first 5 months of 2025. Han Tiancheng's profit indicators are also fluctuating. From 2022 to the first 5 months of 2025, the company's gross profit was $197 million, $445 million, $332 million, and $49.743 million, with gross profit margins of 44.7%, 39%, 34.1%, and 18.7% respectively. The profitability of Han Tiancheng has shown exceptional fluctuations in the first 5 months of this year. It is reported that this is mainly due to changes in the product mix, reflected in the decrease in the sales share of wafer foundry services (with high profit margins) and an increase in the share of other revenues. During the same period, the company's net profit was $143 million, $122 million, $166 million, and $14.147 million respectively. Han Tiancheng's market leader's efforts in the market 8-inch epitaxy wafer again? Due to the decrease in raw material costs, cost optimization resulting from technological maturity, and a significant increase in production capacity, the prices of silicon carbide epitaxial wafers have continued to decline in the past few years. Taking the 6-inch silicon carbide epitaxial wafer as an example, the average price of this product in 2024 was about $7,300 per wafer, a decrease of over 30% compared to $11,400 per wafer in 2020. It is worth noting that according to forecasts, by 2029, the average price of 6-inch silicon carbide epitaxial wafers may further drop to $4,400 per wafer, with a potential decrease of nearly 40%. Under the pressure of product price reductions, even for Han Tiancheng, which already holds the global market share, ensuring continued revenue growth is not easy. For Han Tiancheng, there are probably two main paths to look forward to in the future: on the one hand, through technological innovation to maintain its position at the forefront of the industry, and on the other hand, to continue to develop on a large scale to reduce costs and increase efficiency. In terms of the former, currently, the 8-inch silicon carbide epitaxy technology is rapidly developing from an industry perspective. With the maturation of the 8-inch silicon carbide wafer manufacturing process and the improvement of quality, its application is expected to accelerate in the future. It is understood that for chips of the same specification, larger chips can reduce the proportion of edge chips and increase the number of bare chips produced per wafer, significantly increasing the chip utilization rate and reducing unit costs. Taking a 32 square millimeter chip as an example, by expanding the silicon carbide epitaxial wafer from 6 inches to 8 inches, the chip area can increase by 1.8 times, the proportion of edge chips can decrease from 14% to 7%, and the number of bare chips can increase by 90%. Looking at this high certainty industry trend, Han Tiancheng has already entered the game by achieving a breakthrough in 8-inch silicon carbide epitaxial wafer technology and supplying it in large quantities to global customers. As of the end of May, Han Tiancheng has established cooperation relationships with 18 companies for their 8-inch products. Data shows that Han Tiancheng's sales of 8-inch silicon carbide epitaxial wafers increased from 285 wafers in 2023 to 7,466 in 2024, and the sales volume for the first 5 months of this year was 2,914 wafers, a significant increase compared to 988 wafers in the same period last year. It can be reasonably concluded that by strategically allocating additional capacity to expand production of 8-inch silicon carbide epitaxial wafers, this can help Han Tiancheng gain a larger market share and optimize profitability by reducing unit fixed costs. The new industry competition has already begun, which may explain why Han Tiancheng is determined to go public, as successful listing on the Hong Kong stock market would undoubtedly have immeasurable positive impacts on its preparations for the research and expansion of 8-inch silicon carbide epitaxial wafers and seeking greater development in overseas markets.