Tianyu Semiconductor was founded in 2009 and is one of the earliest enterprises in China to achieve industrialization of third-generation semiconductor silicon carbide epitaxial wafers. The company focuses on independent research and development, mass production, and sales of silicon carbide epitaxial wafers. Its core product is 4H SiC epitaxial wafers, and it has successfully achieved mass production of 8-inch epitaxial wafers in 2023. In the field of silicon carbide technology, Tianyu Semiconductor has accumulated rich experience and mastered the key technologies required for producing unipolar and bipolar power devices. It has now grown into one of the largest silicon carbide epitaxial wafer manufacturing enterprises in China.

Huawei and BYD participate in the investment

According to the prospectus, Tianyu Semiconductor plans to use the net funds raised from the IPO for multiple purposes. Part of the funds will be used to expand overall production capacity, including equipment procurement, production line expansion, base construction, and talent recruitment, in order to enhance market share and product competitiveness; Another portion of the funds will be used to enhance independent research and innovation capabilities, improve product quality, shorten the development cycle of new products, and respond more quickly to market demand. In addition, the funds will be used for strategic investments or acquisitions, expanding global sales and marketing networks, as well as supplementing working capital and general corporate purposes.

However, despite significant achievements in technology and market, Tianyu Semiconductor still faces certain financial challenges. The prospectus shows that although the company's revenue and gross profit have increased in recent years, the problem of operating losses still exists, especially in the first half of 2024, when the company's revenue and gross profit both declined. This situation has attracted widespread attention from the industry and raised questions about the company's future profitability.

In addition, the controlling shareholder structure of Tianyu Semiconductor provides strong guarantees for its future development. Huawei and BYD, as the main shareholders of the company, hold 6.57% and 1.5% of the shares respectively. The investments of these two major enterprises not only provide financial and technological support for Tianyu Semiconductor, but also provide strong endorsement for its market expansion and brand building. In both domestic and international markets, having the support of these well-known enterprises is often seen as an important driving force for company growth.

Leader in silicon carbide epitaxial wafers

According to authoritative market research firm Frost&Sullivan, Tianyu Semiconductor has established itself as a technology pioneer and industry leader in the field of silicon carbide epitaxial wafers in China. In 2023, the company successfully sold over 132000 silicon carbide epitaxial wafers (including self-developed products and OEM services), achieving a total operating revenue of RMB 1.171 billion.

In the same year, Tianyu Semiconductor achieved a market share of 38.8% (by revenue) and 38.6% (by sales) in the Chinese silicon carbide epitaxial wafer market, firmly ranking first in the industry. Globally, the company's revenue and sales share in the epitaxial wafer market are both about 15%, ranking among the top three in the world.

As a pioneer in China's third-generation semiconductor industry, Tianyu Semiconductor has always been at the forefront of the development of silicon carbide epitaxial wafer technology. As the mainstream epitaxial wafer size in the industry upgrades from 4 inches to 6 inches and gradually moves towards 8 inches, Tianyu Semiconductor has always led this development trend.

Tianyu Semiconductor is not only one of the first enterprises in China to achieve mass production of 4-inch and 6-inch silicon carbide epitaxial wafers, but also one of the few companies in China with the ability to produce 8-inch silicon carbide epitaxial wafers. As of October 31, 2024, the annual production capacity of the company's 6-inch and 8-inch epitaxial wafers has reached approximately 420000 pieces, making it one of the largest enterprises in China in terms of 6-inch and 8-inch epitaxial wafer production capacity.

Financial performance

From 2021 to the first half of 2024, Tianyu Semiconductor's revenue was RMB 155 million, RMB 437 million, RMB 1.171 billion, and RMB 361 million respectively; During the same period, the gross profit for the year was 24.205 million yuan, 87.486 million yuan, 217 million yuan, and -43.754 million yuan, respectively.

As a core supplier of third-generation silicon carbide semiconductor materials, Tianyu Semiconductor has benefited from the rapid development of China and the global new energy industry, resulting in a significant increase in product shipments. During this period, the company's sales (including self-produced and OEM services) increased from 17001 pieces in 2021 to 44515 pieces in 2022, and further increased to 132072 pieces in 2023, with a compound annual growth rate of 178.7%.