As a representative of the third generation of semiconductors, silicon carbide is known as a "green" semiconductor. It has superior properties such as high temperature resistance, high voltage, and high frequency. It can be widely used in new energy, photovoltaics and other fields, thus becoming the future development trend of semiconductors. SICC was established in Jinan, Shandong in 2010. It is a technology-based enterprise focusing on the research and development, production and sales of silicon carbide single crystal substrate materials.
With the blessing of a highly prosperous track, SICC has attracted more and more attention from all walks of life in recent years. At present, SICC, which has only been established for 12 years, has obtained more than 460 core patents in the semiconductor field and has undertaken a number of national-level R&D and industrialization projects. In 2022, SICC was rated as a leading technology enterprise in Shandong Province and a leading enterprise in Shandong Province's "Top Ten" industrial clusters, and became one of the technology-based enterprises supported by the Huaiyin District Government of Jinan City.
According to data from Yole, the SiC device market size will reach US$596 million in 2020, and is expected to reach US$2.562 billion by 2025, with a compound annual growth rate of 33.6%.
Recently, domestic silicon carbide leader SICC released its 2022 performance forecast, stating that during the reporting period, the company is expected to lose 150 million yuan to 185 million yuan, turning profits into losses compared with the previous year.
As for the reason for the loss, SICC stated that macro factors such as repeated epidemics, global geopolitical turmoil, and inflation in 2022 will have an adverse impact on the company's progress in new production capacity. The company has actively adjusted the production capacity of the existing Jinan factory and gradually increased the conductivity type substrate production capacity.
In the process of adjusting the main product structure, temporary production capacity declines due to production line and equipment adjustments, etc., which in turn affects the decline in operating income and comprehensive gross profit margin. According to the company's preliminary calculations, the operating income this year is expected to be 415 million yuan to 430 million yuan. It decreased by 12.93% year-on-year to 15.97%, and the comprehensive gross profit margin for the year turned from positive to negative.
In addition, in 2022, SICC's salary expenses increased significantly due to the large number of people recruited for the commissioning of new production capacity. At the same time, increased investment in research and development and a relatively reduced government subsidies also had a significant impact on its net profit.
A report from Yole shows that SICC’s market share of advanced semi-insulating silicon carbide substrates has ranked among the top three in the world for three consecutive years. In January 2022, SICC was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange as the "first silicon carbide stock" and was highly anticipated by many institutions. However, SICC's performance in the secondary market is surprising. It broke on the first day of trading, falling more than 6%. About four months after listing, the decline was as high as 40%, and its market value evaporated by 14.7 billion yuan.
Looking at it now, it has been more than a year since SICC was listed, and the stock price trend has been relatively stable. However, at the same time, Tianyue Advanced's performance is still unsatisfactory. From 2018 to 2021, SICC only had no losses in 2021, and its net profit attributable to the parent that year was 90 million yuan. In the three years from 2018 to 2020, Tianyue Advanced lost 42 million yuan, 201 million yuan and 642 million yuan respectively, with a total loss of nearly 900 million yuan. Judging from the recently released performance forecast, SICC, which only took one year to turn around losses, will suffer losses again in 2022. As of the end of June 2022, the gross profit margin of SICC's advanced core product silicon carbide substrate was only 5.92%, a decrease of 26.91% from the same period last year; the gross profit margin of other products was -43.92%.
