SICC Co., Ltd. (688234.SS): BCG Matrix [Dec-2025 Updated]

SICC's portfolio reveals a clear capital-allocation story: high-growth Stars-8‑inch and conductive N‑type SiC substrates and rapid overseas expansion-are eating most IPO proceeds to seize EV-driven market share, while mature 6‑inch and 4‑inch Cash Cows fund R&D; Question Marks like 12‑inch wafers, liquid‑phase growth and P‑type substrates demand heavy bets with uncertain payoffs, and legacy carbon products and consulting are Dogs likely ripe for divestment-read on to see how each unit will shape SICC's race to dominate next‑gen power semiconductors.

SICC Co., Ltd. (688234.SS) - BCG Matrix Analysis: Stars

Stars

8-inch conductive silicon carbide (SiC) substrates constitute a primary star for SICC, reflecting both rapid market growth and SICC's strong relative market share. The global 8-inch SiC substrate market is forecasted to grow at a CAGR of 96.3% from 2025 to 2032, driven predominantly by electric vehicle (EV) adoption and server/infrastructure electrification. SICC allocated approximately 70% of its recent HK$260 million IPO proceeds (~HK$182 million) specifically to expanding production capacity for 8-inch and larger wafers. As of late 2025 SICC is positioned as a leader in the 8-inch wafer segment, directly competing with Wolfspeed and Coherent, and the company expects 8-inch wafers to rise from <2% of shipments in 2024 to >15% by 2026.

• Key demand drivers: EV traction inverters, on-board chargers, renewable inverters.
• Capacity focus: 8-inch and larger wafers to capture economies of scale and device-per-wafer gains.
• Strategic outcome: rapid volume ramp targeted to convert high growth projections into market share gains.

Conductive N-type substrates for EV applications represent another star: SICC reported a global SiC substrate market share of 22.8% in 2024, ranking in the top three globally with Wolfspeed and TanKeBlue. The conductive N-type segment benefits from the broader SiC power device market trajectory, which is estimated to reach US$9.17 billion by 2028. SICC's Shanghai Lingang plant achieved large-scale delivery capacity during 2024, contributing to the company's 41.37% year-over-year revenue growth for that year. Short-term price volatility in 2025 affected margins but did not alter the unit's status as a star because of its high relative market share and the sustained double-digit growth outlook of EV and renewable energy markets.

• Product positioning: conductive N-type substrates optimized for EV traction modules and fast chargers.
• Operational strengths: scalable Shanghai Lingang production enabling volume and delivery reliability.
• Risks managed: short-term price swings; mitigated by long-term contract negotiations and capacity discipline.

Overseas market expansion is a third star: international revenue reached CNY 840.48 million in 2024, representing approximately 47.53% of total revenue. SICC is targeting a 20% revenue increase in Southeast Asian markets by end-2025 to diversify geographic exposure and capture regional EV and industrial demand. The global semiconductor market in which this unit operates is projected to grow at a CAGR of ~8% through 2028. SICC leverages cost-competitive China-based manufacturing, scale in SiC substrates and growing international distribution to sustain high-growth performance.

• International diversification: nearly half of sales from outside China reduces single-market concentration risk.
• Growth levers: channel partnerships, localized service support, and cost-competitive exports.
• Strategic importance: overseas growth is a high-growth engine sustaining consolidated revenue momentum.

SICC Co., Ltd. (688234.SS) - BCG Matrix Analysis: Cash Cows

Cash Cows

6-inch semi-insulating silicon carbide (SiC) substrates represent SICC's primary cash cow, supplying stable, predictable cash flow from mature RF and 5G infrastructure markets. The 6-inch semi-insulating product line has been a core foundation since commercialization, with SICC maintaining a global market share exceeding 15% since 2019. Market-volume dynamics in 2025 show 6-inch wafers still constituting over 60% of total SiC substrate volume, underpinning recurring revenue and consistent gross margins.

SICC's 6-inch segment economics (estimates as of September 2025):

The company-wide financial context: total operating revenue reached 1.60 billion CNY for the twelve months ending September 2025, while consolidated gross margin stood at 19.81% as of that date. The 6-inch cash cow is a key driver of these figures through steady ASPs, mature process yields and lower per-wafer production investment compared with new 8-inch lines.

Operational characteristics and strategic role of cash cows:

• Stable production yields on established 6-inch lines enable predictable unit costs and margin stability.
• Lower incremental CAPEX versus 8-inch or experimental 12-inch platforms allows harvesting of operating cash flow.
• 6-inch volumes provide working capital and liquidity to fund targeted R&D and pilot investments in larger-diameter technologies.
• 4-inch legacy lines require minimal reinvestment, delivering positive operating cash flow despite limited top-line growth.

4-inch substrates function as a legacy cash cow: widely adopted in lower-tier power devices and industrial applications, they generate reliable revenue with minimal incremental investment. Although automotive and large-scale power markets are migrating toward 8-inch and larger diameters, the 4-inch base continues to contribute materially to operating cash and supports margin smoothing during transitions.

Key financial and strategic impacts:

• Cash conversion: High contribution from 6-inch and 4-inch segments enables SICC to convert revenue into free cash flow sufficient to service R&D outlays and pilot CAPEX for 8-inch expansion and 12-inch experimentation.
• Margin buffer: Combined effect of mature segments helped sustain a consolidated gross margin near 19.81% as of Sep 2025 despite elevated spending on new technologies.
• Resource allocation: Management can prioritize incremental investment into higher-growth, higher-CAPEX 8-inch capacity while harvesting cash from 6-inch and 4-inch operations.

SICC Co., Ltd. (688234.SS) - BCG Matrix Analysis: Question Marks

Dogs - Question Marks

12-inch silicon carbide (SiC) substrate development represents a high-risk, high-reward venture at the technology frontier. SICC publicly unveiled a full product series of 12-inch SiC substrates (conductive P-type and N-type) at Semicon China in March 2025; these products currently contribute 0% to commercial revenue and carry substantial technical scaling challenges (substrate yield, wafer bow, defect density, and metrology validation).

Liquid-phase method SiC crystal growth is positioned as a potential disruptive process alternative to traditional PVT (physical vapor transport). SICC emphasized liquid-phase techniques repeatedly in technical presentations in early 2025 to address cost-per-wafer and crystal defect limitations inherent in PVT. The technology remains in pilot/early-industrialization, with low market share despite the projected high growth of the SiC substrate market driven by EV power electronics.

• R&D intensity: SICC reported R&D expenses of 186 million CNY in the 12 months ending September 2025, reflecting concentrated investment in experimental growth methods and ultra-large wafer engineering.
• Capital allocation: ~20% of IPO proceeds earmarked for advanced R&D programs (including 12-inch R&D and liquid-phase process pilots).
• Revenue risk profile: current direct revenue contribution from these Question Mark technologies = 0%-negligible, implying long payback and dilution risk if commercialization delays occur.

Conductive P-type 12-inch substrates occupy a narrow, specialized niche. SICC launched the world's first 12-inch liquid-phase P-type substrate in 2024 and continued promotion through 2025; however, P-type demand is concentrated in select advanced power domains and does not yet exhibit the volume drivers of N-type substrates used in mainstream EV inverters. Market traction remains low, leaving P-type as a Question Mark with uncertain path to becoming a Star.

Key downside risks and performance metrics to monitor for these Question Marks:

• Technical milestones: pilot yield (%) for 12-inch wafers, defect density (cm^-2), wafer bow (
• Financial burn: continued R&D run-rate versus commercialization timelines-186M CNY R&D spend as of Sep 2025 provides a baseline; incremental 20% of IPO proceeds allocated to advanced R&D increases runway but not guarantee of market capture.
• Market adoption indicators: qualified customer design wins, pilot orders volume, unit cost trajectory relative to N-type benchmarks, and time-to-qualified-supply for EV OEMs and power module manufacturers.

Strategic options available to SICC for these Dogs/Question Marks include prioritizing resource allocation toward N-type scale-up, establishing partnerships or licensing for liquid-phase know-how, selective external funding for pilot lines, or staged go/no-go gates tied to technical KPIs and customer commitments.

SICC Co., Ltd. (688234.SS) - BCG Matrix Analysis: Dogs

Legacy graphite and carbon product manufacturing ('Other Business' - legacy units) represented a low-growth, low-share segment for SICC in recent periods. This category generated approximately 17.17% of consolidated revenue in H1 2025 (pro-rata of full-year 2024 base), with absolute revenue from Other Business reported at CNY 294.45 million for FY2024. Growth for these products trailed the semiconductor materials division by a wide margin: 2.8% YoY for legacy carbon products in FY2024 vs. 48% YoY for SiC substrate and related materials in the same period.

Financial performance metrics for legacy graphite/carbon units indicate persistent margin pressure and limited cash generation. Estimated gross margin for the legacy product line was ~8.5% in FY2024, compared with consolidated gross margin of ~27.3% for the group. Contribution to operating profit was minimal: legacy units contributed an estimated 0.5 percentage points to consolidated operating margin in FY2024. Company-wide net profit margin was 2.32% in late 2025, further underscoring the low-margin nature of these legacy lines.

Key characteristics identifying these units as 'Dogs':

• Low market growth: legacy carbon demand stagnant at single-digit low growth (~2-3% YoY).
• Low relative market share: specialized carbon manufacturers hold stronger positions and price competition is intense.
• Thin margins: gross margins ~8.5% vs. group average ~27% and net margin ~2.32%.
• Limited strategic fit: shifting corporate R&D and capex toward SiC substrates and epitaxy materials.
• High opportunity cost: management attention and capital yield higher ROI when redeployed to core semiconductor materials.

Operational and financial risks specific to these Dog segments include concentrated capex inefficiency, inventory obsolescence risk for older carbon product lines, and escalating unit cost competitiveness from pure-play carbon firms. Recent internal allocation data shows capex to legacy units fell by ~36% between 2022-2025 while capex to SiC-related lines rose by ~210% over the same period.

Recommended tactical actions (quantitative focus):

• Divest or spin-off legacy graphite/carbon units if valuation multiples exceed internal hurdle - target cash proceeds ≥ 1.0x book value to fund SiC expansion.
• Outsource low-margin manufacturing steps to third-party carbon specialists to reduce fixed cost base and improve consolidated EBITDA by estimated 120-180 basis points.
• Terminate or bundle technical consultation services into paid-for IP/licensing packages; set minimum contract size > CNY 500k to justify internal overhead.
• Reallocate workforce and R&D budget: shift ~60-75% of personnel and 70-90% of incremental R&D CAPEX from Other Business to SiC substrate and epitaxy projects over 24 months.

Performance monitoring KPIs to manage wind-down or transformation:

• Quarterly revenue run-rate for legacy units (target decline >10% QoQ if exiting within 12 months).
• Unit gross margin improvement post-outsourcing (target +300-500 bps within 2 quarters).
• Free cash flow impact from divestment proceeds (target CNY +200-500 million redeployed to SiC capex).
• Headcount reduction / redeployment ratio (target ≥50% redeployed into core semiconductor areas).