Gradually build a foundation
From a macro perspective, companies in the field of silicon carbide substrates still face temporary pressure brought about by price competition, but it seems to have improved compared to the previous year.
Tianyue Advanced (80.720, -0.71, -0.87%), a leading domestic silicon carbide substrate company, previously released its third quarter financial report, which showed that the company achieved a revenue of 318 million yuan during the period, a year-on-year decrease of 13.76%, and a total revenue decline of 13.21% in the first three quarters; In the third quarter, the company achieved a net profit attributable to the parent company of 9.76 million yuan, a year-on-year decrease of 123.72%, and a total decrease of 99.22% in the first three quarters.
The announcement pointed out that the reason for the decline in revenue is that in order to cope with fierce market competition, expand the market application of silicon carbide products, and strive for higher market share, the company strategically lowered product sales prices.
The decline in net profit is mainly affected by the decrease in product sales prices, resulting in a decrease in operating income and gross profit; At the same time, customer testing and sample delivery of new products have increased sales expenses, while R&D investment in large-sized and new application products has increased R&D expenses. Changes in foreign exchange rates have resulted in exchange gains and losses, leading to a year-on-year increase in financial expenses.
The advanced performance of Tianyue is also a microcosm of the current competitive situation faced by the silicon carbide substrate industry.
Looking back at the price fluctuation logic of the silicon carbide substrate market, Yu Yiran, Managing Director of CIC Zhuoshi Consulting, pointed out to 21st Century Business Herald reporters that compared to previous years where yield improvement was brought about by process improvement, the price reduction of silicon carbide substrate materials in 2024 is mainly due to capacity expansion and intensified competition among substrate manufacturers.
The annual price reduction of 6-inch silicon carbide conductive substrates in 2024 is about 30%, and some manufacturers quote below 3000 yuan per piece, which is close to the cost line of most manufacturers. Although this year continues the downward trend of last year, overall, the downward trend has slowed down compared to last year, and the price reduction space is limited. Among them, the prices of automotive grade and customized products are still strong, while the price competition for low-end and general-purpose substrates will be relatively fierce, "she further added.
TrendForce consulting analyst Gong Ruijiao also told 21st Century Business Herald reporters that the price of 6-inch silicon carbide substrates still has a significant downward trend this year, but has basically hit the bottom, and it is expected that the price will remain relatively stable in the future.
Regarding the current market sentiment of silicon carbide, during an online investor exchange event on December 5th, executives from Tianyue Advanced Company responded that product price trends are influenced by multiple factors such as macroeconomic conditions, supply and demand relationships, and industry development stages. Recently, the industry's production capacity structure has been continuously optimized, and the downstream destocking cycle is gradually advancing. The irrational competition factors in the industry are decreasing, and the price system will gradually return to rationality and stability.
The company has felt that downstream customers' purchasing willingness is gradually increasing with the recovery of industry demand, and the power semiconductor and silicon carbide markets are showing a positive trend. As the mainstream upgrade direction in the industry, 8-inch and 12 inch products benefit from the release of demand in new energy vehicles, energy storage, data centers, advanced packaging, AR optical waveguides and other fields. ”The company executives pointed out this.
In addition to expanding the production of 6-inch silicon carbide substrates, actively promoting the development towards larger sizes such as 8-inch is also an important trend in China.
Yu Yiran pointed out to reporters that the production capacity of 8-inch substrates in China is growing rapidly, but the volume is still limited compared to the total 6-inch volume. In theory, an 8-inch unit area is larger, and when converted to a single chip, it has a significant cost dilution advantage in the long run. However, there is still room for improvement in yield, equipment depreciation, and process maturity. For downstream manufacturers, there is currently no significant effect of mass production cost reduction
She also mentioned that switching from 6-inch to 8-inch products requires product re importation, which has a certain period of time, and it is expected that the 8-inch production will still take some time. From an application perspective, new energy vehicles are the largest downstream of silicon carbide power devices, with stable demand growth. Switching from 6-inch to 8-inch has economic advantages and is expected to become the first scenario for 8-inch mass production and landing