Analysis and judgment

Tianyue Advanced achieved further business success in 2024, and its profitability is fully on track. With the accelerated penetration of silicon carbide materials in terminal fields such as new energy vehicles, photovoltaic power generation, energy storage, and AI applications, the overall market size of the company continues to expand. In this context, the company is deeply engaged in the silicon carbide substrate business, while also balancing research and development innovation with market development, and strengthening deep cooperation with well-known domestic and foreign customers.

Revenue growth: The continuous release of production capacity and optimization of product structure in 2024 have driven the company's revenue to continue its rapid growth in 2023.

Profitability improvement: In 2024, the company strengthened its cost reduction, efficiency improvement, and management capabilities, resulting in a significant improvement in profitability. The comprehensive gross profit margin reached 25.90%, a year-on-year increase of 10.09 percentage points, while the gross profit margin of the main business silicon carbide substrate reached 32.92%, a year-on-year increase of 15.39 percentage points.

Q1 performance: Although the revenue slightly decreased in Q1 2025, the gross profit margin of 23.95% increased by 2.03 percentage points compared to the same period in 2024, demonstrating the company's continuous improvement in gross profit margin.

2. Capacity building and large-scale transformation are steadily advancing

Tianyue Advanced focuses on the research and industrialization of high-quality silicon carbide substrates, and steadily promotes production capacity construction and large-scale transformation

Capacity building:

Shanghai factory: The production capacity plan of producing 300000 conductive substrates per year has been achieved ahead of schedule, and the second phase capacity improvement plan is being orderly promoted.

Jinan factory: Production capacity is steadily advancing, and the output of silicon carbide substrates will reach 410200 pieces in 2024, a year-on-year increase of 56.56%.

Leading 8-inch substrate product quality: The company has established leading 8-inch substrate product quality and batch supply capabilities, becoming one of the few market participants in the world capable of mass producing 8-inch silicon carbide substrates. With the continuous improvement of 8-inch substrate production capacity, Tianyue Advanced continues to promote the transformation of its top customers towards 8-inch substrates.

Technological innovation and large-scale upgrading:

Launch of 12 inch silicon carbide substrate: In 2024, Tianyue Advanced launched the industry's first 12 inch silicon carbide substrate. Compared to 8 inches, this larger size will significantly increase the area available for chip manufacturing on a single wafer, while also increasing the production of qualified chips under the same yield conditions, providing technical support for long-term cost reduction in the silicon carbide industry.

Industry leading position: According to a report by Fuji Economy in Japan, Tianyue Advanced ranks second in the global conductive silicon carbide substrate market with a market share of 22.80% in 2024.

3. Innovation in terminal applications drives demand for silicon carbide, with broad long-term growth potential

Innovation in terminal applications:

Driven by the two major industries of new energy and AI, silicon carbide materials are accelerating their penetration into various end use applications. Especially in the fields of electric vehicles, photovoltaic systems, energy storage systems, etc., silicon carbide power semiconductor devices help the global energy transition by improving power conversion efficiency.

AI application driven: With the continuous growth of AI computing demand, data centers, as the core infrastructure supporting AI computing power demand, have higher requirements for power conversion efficiency, further driving the demand for silicon carbide power semiconductors.

Electric vehicles and new energy: Silicon carbide materials provide the necessary power conversion efficiency for electric vehicle charging systems and photovoltaic energy storage systems, helping the global energy system transition to low-carbon.

Company Strategy:

With its profound accumulation in the field of silicon carbide materials, Tianyue Advanced has become a supplier for more than half of the top ten power semiconductor device manufacturers in the world. Its products have been widely used in multiple terminal fields such as electric vehicles, AI data centers, and photovoltaic systems. According to Frost&Sullivan's data, as the global new energy industry continues to expand, silicon carbide materials will occupy an increasingly important position in the global power semiconductor device market. It is expected that by 2030, the global penetration rate of silicon carbide power semiconductor devices will reach 22.60%, driving the growth of the substrate end market to 66.4 billion yuan.

4. Risk Warning

Although the company is steadily advancing in capacity building and technology research and development, the following risk factors still need to be considered:

Terminal demand falls short of expectations: If demand growth in areas such as new energy and AI slows down, it may affect the market demand for the company's products;

Industry competition intensifies: The competition in the silicon carbide market is becoming increasingly fierce, especially in the low-end product field, which may lead to price war pressure;

Research and development progress falls short of expectations: If technological innovation fails to meet market demand, it may affect the company's long-term competitiveness.