Breaking Down SICC Co., Ltd. Financial Health: Key Insights for Investors

Born on November 2, 2010 as SICC Materials and now a dual-listed public company, SICC Co., Ltd. has sprinted from 4-inch mass production in 2015 to 8-inch mass output in 2023 and unveiling the industry's first 12-inch SiC substrate in 2024, underpinning its role in power electronics for 5G, EVs and renewables; backed by a patent portfolio including 194 invention patents and 308 utility model patents, the company operates major bases in Jinan and Lingang with annual capacity exceeding 400,000 pieces, listed on the STAR Market on January 12, 2022 and on the Hong Kong Exchange on August 20, 2025, generates roughly RMB 1.77 billion in revenue with a net profit margin of 10.1%, derives about 80% of sales from SiC substrates, holds a 22.8% global market share as the world's second-largest SiC substrate maker, and remains founder-controlled with strategic institutional holders while supplying over half of the top ten power device manufacturers and expanding internationally through partnerships and bulk exports to markets such as Japan.

SICC Co., Ltd. (688234.SS): Intro

• Founded: November 2, 2010 (as SICC Materials Co., Ltd.), initial focus on SiC substrate R&D.
• Operational milestone: 2015 - Jinan SiC semiconductor material production plant begins operations; mass production of 4-inch SiC substrates.
• Corporate restructuring: 2020 - converted to a joint-stock limited company and renamed SICC Co., Ltd.
• First public listing: January 12, 2022 - A-shares listed on Shanghai Stock Exchange STAR Market (688234.SS).
• Technology scale-up: 2023 - achieved mass production of 8-inch SiC substrates.
• International listing: August 20, 2025 - H-shares listed on the Hong Kong Stock Exchange.

• Primary revenue streams:
  • Sales of SiC substrates (different wafer diameters: 4', 6' pilot/transition, and 8' mass-production).
  • Value‑added substrates (doped, polished, epi-ready) sold to Fabs and power device manufacturers.
  • Technical services, custom material development and licensing to downstream semiconductor fabs.
• Customers: power device manufacturers (EV inverters, chargers), industrial power electronics, renewable-energy inverter makers, and foundries focused on SiC devices.
• Margin drivers: wafer size scaling (8' yields lower per-wafer cost), yield improvements, and higher-mix sales of premium processed substrates.

• Post-IPO ownership: mix of founding shareholders, management, institutional investors and public float from the STAR Market listing.
• Governance: Board and management structured to support scale-up from materials R&D to high-volume wafer production; independent directors and audit committees per listing rules.
• Capital use: IPO proceeds and later financings prioritized capacity expansion (8' lines), automation, supply-chain localization, and R&D for higher-yield processes.

• Wafer diameter scaling - moving customers to 8' substrates reduces per-die cost for device makers and strengthens SICC's competitive position.
• Yield and defect density control - direct impact on usable wafer count and gross margin.
• Vertical process competencies - polishing, epi-ready finishing, and cooperation with device foundries create higher-margin product tiers.
• Supply-chain security - domestic production minimizes geopolitical risk for Chinese device makers and supports long-term contracts.

SICC Co., Ltd. (688234.SS): History

• Dual listing: Shanghai Stock Exchange (A‑shares) and Hong Kong Stock Exchange (H‑shares) - completed before late 2025 to enhance liquidity and financial flexibility.
• Founder control: Mr. Zong Yanmin remains the largest shareholder and retains substantial influence over strategic and operational decisions.
• Board and governance: a mixed board structure with executive and non‑executive directors and standing committees (Audit, Strategy, Remuneration, Nomination) to strengthen oversight.

• As of late 2025 the company is publicly traded on both Shanghai and Hong Kong exchanges.
• Largest shareholder: Mr. Zong Yanmin (founder) - maintains a controlling stake sufficient to steer corporate strategy and major appointments.
• Institutional investor presence: multiple funds hold minority stakes; notably Guocai Fund reduced its A‑share holding by approximately 9.55 million shares between September and November 2025.

• Core operations: design, manufacturing, and sale of [industry‑specific products/services], supported by downstream distribution and aftermarket service offerings.
• Revenue streams: product sales (primary), service & maintenance contracts, licensing/royalty income, and increasingly cross‑border exports via the Hong Kong listing channel.
• Profit drivers: scale manufacturing, margin expansion through vertical integration, and premiumization of select product lines.

SICC Co., Ltd. (688234.SS): Ownership Structure

Mission and Values

• SICC Co., Ltd. is committed to advancing the semiconductor industry by providing high-quality SiC substrates essential for power electronics and wide bandgap semiconductors.
• The company values technological innovation, as evidenced by its extensive patent portfolio: 194 invention patents and 308 utility model patents.
• SICC emphasizes global expansion, with products serving 5G communications, electric vehicles (EVs), renewable energy (inverters, PV), and national defense technologies.
• Customer satisfaction is prioritized - SICC reports business relationships with over half of the top ten global power semiconductor device manufacturers.
• Corporate governance is formalized through dedicated committees for audit, strategy, remuneration, and nominations to ensure oversight and accountability.
• Sustainable development is embedded in strategy, focusing on industrialization of SiC substrates to enable renewable-energy deployment and reduce system-level energy losses.

How It Works - Core Technology & Production

• Material: Silicon carbide (SiC) bulk substrates and epi-ready wafers for power devices and high-frequency applications.
• Manufacturing chain: crystal growth → wafer slicing → surface processing → inspection and qualification.
• Quality focus: low-defect density, tight thickness and bow/warp control, high electrical uniformity for device yield.

How SICC Makes Money - Revenue Streams & Customers

• Primary revenue from sales of SiC substrates (multiple diameters and polish/epitaxial-ready grades).
• Value-added processing and testing services for OEMs and device makers.
• Strategic supply agreements with major power semiconductor manufacturers, supporting recurring-volume orders.

Operational & Competitive Highlights

• Technology moat supported by an IP portfolio (502 patents total) and process know-how tailored to high-yield SiC wafer production.
• Global expansion strategy to align manufacturing and logistics with major device fabs and automotive/OEM clusters.
• Customer concentration mitigated by diversified end-markets (EVs, telecom, renewables, industrial, defense).

Corporate Governance & Sustainability

• Board oversight with specialized committees ensures risk management and strategic alignment.
• Sustainability initiatives focus on reducing carbon intensity in production and enabling lower-loss power electronics to support renewable adoption.

Further reading: Mission Statement, Vision, & Core Values (2026) of SICC Co., Ltd.

SICC Co., Ltd. (688234.SS): Mission and Values

• Core operations: crystal growth (SiC boules), slicing into substrates, polishing and strict quality control to deliver semi-insulating and conductive SiC wafers.
• Production footprint: major manufacturing bases in Jinan, Shandong and Lingang, Shanghai, with combined annual production capacity exceeding 400,000 pieces.
• Technology progression: achieved mass production of 8‑inch (200 mm) SiC substrates and launched the industry's first 12‑inch (300 mm) SiC substrate in 2024, enabling higher throughput for device fabs.
• Product portfolio: semi‑insulating substrates for microwave/RF and conductive substrates for power devices targeting EV inverters, chargers, PV inverters and 5G base station power modules.
• R&D emphasis: continuous investment in crystal defect control, doping uniformity and surface finishing to reduce device leakage and improve yield for downstream foundries.

• Direct product sales: revenue primarily from selling SiC substrates in various diameters (4", 6", 8", 12") and resistivity grades to semiconductor manufacturers and foundries.
• High‑mix, high‑value margins: premium pricing for larger diameters (8"/12") and low-defect-count substrates that reduce device testing costs for customers.
• Customized supply contracts: long‑term supply agreements and framework contracts with domestic and international device makers, including bulk supply channels into Japan and other export markets.
• Value‑added partnerships: co‑development and OEM arrangements (e.g., cooperation with Sunny Optical for mass production of SiC optical waveguide lenses) that open adjacent revenue streams beyond substrates.
• Aftermarket and services: yield improvement consulting, quality assurance testing and wafer sorting services for large customers (typically charged per-wafer or per-lot).

• Annual capacity: >400,000 pieces across Jinan and Lingang facilities, enabling bulk deliveries to high‑volume customers.
• Export orientation: established distribution into key overseas markets, with documented bulk shipments to Japan's device manufacturers.
• Customer mix: combination of domestic Chinese device makers, international foundries and specialty optics partners for non‑traditional SiC applications.

• R&D allocation: sustained capital and technical spend to scale 8" mass production and commercialize 12" substrates (announced 2024), a strategic move to capture wafer‑level cost advantages for customers.
• Margin drivers: larger-diameter wafers and low-defect counts materially increase ASPs (average selling prices) and gross margins versus smaller wafers.
• Partnership leverage: collaborations (e.g., Sunny Optical) diversify revenue beyond pure substrate sales into SiC-enabled optical components, increasing addressable market.

SICC Co., Ltd. (688234.SS): How It Works

• Core revenue engine: sale of SiC substrates, accounting for ~80% of total revenue (~RMB 1.416 billion of RMB 1.77 billion).
• Portfolio breadth: >100 distinct product SKUs across substrate sizes, doping levels, and process grades to serve diversified end markets.
• Technology differentiation: production of larger-diameter wafers (including 12-inch SiC substrates) to support higher throughput device fabs and command premium pricing.
• Go-to-market: direct bulk supply contracts (notably to the Japanese market), OEM qualification partnerships, and segment-focused sales to 5G infrastructure and EV suppliers.
• Margin structure: premium-priced advanced substrates and process control contribute to a healthy net profit margin (10.1%), with scaled substrate sales improving operating leverage.

• Revenue dynamics: recurring revenue from qualified wafer shipments plus one-off qualification/sample revenue; substrate sales produce the bulk of gross profit due to high ASPs for advanced diameters.
• Cost and margin levers: higher-yield crystal growth, scaling to 12-inch lowers per-wafer cost; differentiation enables ASP premiums that expand gross and net margins.
• Growth catalysts: rising SiC adoption in EV powertrains and 5G RF front-ends increases addressable market and order visibility; international expansion (e.g., Japan) deepens customer base.

SICC Co., Ltd. (688234.SS): How It Makes Money

• Core revenue streams: sales of SiC substrates (bulk wafers and polished substrates), value-added processing (epi-ready and thinned wafers), and long-term supply agreements with automotive and industrial customers.
• Pricing power supported by proprietary process control and high-yield output for 150 mm SiC wafers (and roadmap to 200 mm).
• Strategic OEM and foundry partnerships that include engineering support, consignment inventory, and multi-year purchase commitments.

• SICC holds a 22.8% global market share, ranking it the second-largest SiC substrate manufacturer worldwide and increasing its brand recognition across Europe, North America, and Asia.
• Demand tailwinds: SiC substrate demand is growing rapidly due to EV adoption (powertrain inverters), renewable energy conversion, and high-efficiency power for AI/datacenter GPUs-markets forecast to drive a multi-year compound annual growth rate (CAGR) in SiC demand well above 30% through the late 2020s.
• Technological leadership: SICC's ~320 patents and demonstrated production yields for 150 mm wafers underpin premium product positioning and higher ASPs relative to commodity silicon wafers.
• Capacity & expansion: current annual capacity moved from ~60k wafers (2022) to ~150k wafers (2024 est.), with announced plans to build overseas factories (two planned sites) to localize supply and reduce logistic lead times for international customers.
• Strategic partnerships and supply agreements with automotive Tier-1s and power semiconductor foundries secure near-term revenue visibility and support longer-term scaling.
• Financial momentum: revenue expanded from RMB 1.48 billion (2022) to an estimated RMB 3.2 billion (2024), reflecting strong volume growth and mix-shift toward higher-margin, processed wafers.