Basic Semiconductor passes hearing, aiming to become the first SiC stock on the Hong Kong market.
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On the evening of June 21, the Hong Kong Stock Exchange’s official website disclosed that Shenzhen Basic Semiconductor Co., Ltd. (“Basic Semiconductor”) had officially updated its post-hearing information pack for the Main Board and has successfully passed the IPO hearing.
This silicon carbide power device company, founded in 2016, after experiencing two failed applications in 2025, is now just one step away from entering the Hong Kong capital market as a Chapter 18C Specialist Technology Company. It is understood that China Galaxy International and BOC International are acting as joint sponsors.
According to the prospectus, Basic Semiconductor faces an extremely tough battle to break out of a heavy-asset model: a clear trend of slowing revenue growth and a business model that has yet to achieve a positive closed loop.
On the financial front, Basic Semiconductor’s fundamentals show the typical characteristics of significant upfront investment in heavy assets, with urgent need for capacity monetization in the later stages, but economies of scale have yet to be reflected in profits.
Data shows that from 2023 to 2025, the company achieved operating revenue of 221 million, 299 million, and 311 million yuan, respectively. Notably, year-on-year revenue growth in 2025 plunged to 4.1% from 35.6% the previous year.
Accompanying the slowdown in revenue growth has been a persistently widening loss. In the past three years, the company’s net losses were 342 million, 237 million, and 335 million yuan, respectively, with three-year total losses exceeding 900 million yuan. The net loss rate shrank to -79.3% in 2024, but fell further to -107.6% in 2025.
As a semiconductor company that fully adopted the IDM model in 2020, Basic Semiconductor’s investments in wafer manufacturing and module packaging production lines have brought rigid depreciation and amortization. Added to this are R&D expenses as high as 35.3% of revenue in 2025, and the high costs of silicon carbide substrate raw materials, such that the company has yet to escape the negative cycle of “the more you sell, the more you lose.”
The direct trigger for the expanding losses points to fierce price wars in the terminal market.
Basic Semiconductor’s main source of revenue is automotive-grade and industrial-grade silicon carbide power modules. In 2025, this business generated revenue of 122 million yuan, accounting for 39.3% of the total. However, as the silicon carbide industry shifted rapidly from the early chip shortages and premium pricing of new energy vehicles to a phase of capacity release and intense competition, device prices have been in brutal free fall.
The prospectus shows the company’s average selling price for silicon carbide power modules fell from 2,558.7 yuan per unit in 2023, all the way down to 677 yuan per unit in 2025—a drop of more than 73% in two years.
This intense price pressure directly broke through the earnings defense line. From 2023 to 2025, the company recorded gross losses for three consecutive years, with gross loss margins of -59.6%, -9.7%, and -10.9%, respectively. Core business gross margins remain under pressure to turn positive.
Against the backdrop of pressure on its silicon carbide main business, the company’s business structure and customer distribution are subtly evolving.
In 2025, Basic Semiconductor’s power semiconductor gate driver product revenue reached 103 million yuan, with its revenue share jumping to 33.0%, making it the second-largest revenue pillar.
More importantly, with its core product deeply in gross losses, the gate driver business became the company’s only sector currently achieving positive gross profit, although its gross margin also slipped from 46.4% in 2024 to 33.9% in 2025 due to industry-wide pressures.
Additionally, the company is moving on the risk control front, with dependence on major clients easing. The revenue share from the top five clients fell from 63.1% in 2024 to 40.4% in 2025, and the biggest client’s share dropped from 45.5% to 20.6%, making the overall customer structure healthier.
According to Frost & Sullivan data, based on 2024 revenue, Basic Semiconductor’s market share in the Chinese silicon carbide power module sector is 2.9%, ranking sixth.
In an oligopoly where a handful of international giants hold over 50% market share, Basic Semiconductor has already secured a place in the domestic automotive silicon carbide field, but how it will, through its IPO financing and subsequent wafer and module capacity expansion, cross the profitability threshold amid fierce competition is the hard-core question it must answer with performance after listing.
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