Abstract: In the first half of 2026, StarPower Semiconductor's revenue saw a slight decrease of 0.41%, net profit attributable to shareholders dropped by 76.40%, and the overall gross profit margin fell by 9.16 percentage points. Related businesses of NCE Power, Silan Microelectronics, and CRRC Times Electric are also facing varying degrees of profitability pressure. The semi-annual reports of the four companies indicate that although the power semiconductor industry has experienced localized price increases and demand recovery, rising costs, changes in product mix, divergent downstream demand, and the ramp-up of SiC production lines are still delaying the arrival of a profit turning point.
Flat Revenue, Plummeting Profits for StarPower Semiconductor
On August 25, 2026, StarPower Semiconductor disclosed its 2026 semi-annual report on the Shanghai Stock Exchange. During the reporting period, the company achieved an operating revenue of 1.928 billion RMB, a year-on-year decrease of 0.41%; the net profit attributable to shareholders of the listed company was 65 million RMB, a year-on-year decrease of 76.40%; and the net profit after deducting non-recurring gains and losses was only 46 million RMB, a year-on-year decrease of 82.29%.
Looking solely at revenue, the changes in StarPower Semiconductor's first half of the year were not particularly drastic. What truly widened the gap was cost: with operating revenue remaining basically flat, the company's operating costs reached 1.531 billion RMB, a year-on-year increase of 12.58%. Calculated from this, StarPower's overall gross profit margin dropped from 29.74% in the same period last year to 20.58%, a decrease of 9.16 percentage points over the year; gross profit also fell from approximately 576 million RMB to 397 million RMB, a reduction of over 30%.
This result forms a stark contrast with the continuous news of price increases in the power semiconductor market since 2026.
According to standard industry logic, when power device manufacturers begin to raise product prices, it often indicates that channel inventory is gradually returning to normal, and costs for wafer foundry, packaging and testing, and raw materials are starting to be passed down to the downstream, with industry profitability expected to improve accordingly. However, StarPower's semi-annual report shows that there is still a gap between price adjustments and profit recovery. Even if product selling prices rebound, as long as the increase cannot cover manufacturing costs, depreciation expenses, and changes in product mix, the company's gross profit margin may continue to decline.
From the perspective of business structure, significant divergence has already emerged in StarPower's different downstream markets in the first half of the year. The company's revenue from the new energy industry was 1.019 billion RMB, a year-on-year decrease of 16.02%, still accounting for more than half of the operating revenue; revenue from the industrial control and power supply industry reached 710 million RMB, a year-on-year increase of 40.17%. The rapid growth of the latter alleviated some revenue pressure, but has not yet completely offset the impact of adjustments in businesses such as NEVs (New Energy Vehicles).
Of course, the decline on the profit end may be affected by R&D and manufacturing investments. In the first half of 2026, StarPower's R&D investment reached 249 million RMB, a year-on-year increase of 8.32%, and the proportion of R&D investment to operating revenue rose to 12.91%. Meanwhile, the company is extending its reach into SiC chips and upstream manufacturing, with its 6-inch SiC chip production line still in the ramp-up phase for capacity utilization rate and yield. R&D, depreciation, and production line operating expenses require upfront investment, while new products typically have a long cycle from customer certification and project designation to scaled delivery; these investments are difficult to fully translate into revenue and gross profit in the short term.
StarPower Semiconductor's latest semi-annual report shows that the power semiconductor market has seen demand improvement and cost-driven price increases, but companies still face price competition, downstream structural divergence, and the ramp-up of new capacity.
Selling More, Yet Domestic Power Semiconductors Are Earning Less
In addition to StarPower Semiconductor, representative domestic power semiconductor companies including NCE Power, Silan Microelectronics, and CRRC Times Electric have also recently released their latest semi-annual reports, and a similar phenomenon of concurrent revenue growth and profitability pressure exists. The four semi-annual reports all point to one issue: the power semiconductor industry is recovering, but what is recovering faster at present are shipment volumes and operating revenue, while gross profit margins and net profit after deducting non-recurring gains and losses are still waiting for a true turning point.
Among the four companies, NCE Power showed the most obvious revenue growth. In the first half of 2026, the company achieved an operating revenue of 1.167 billion RMB, a year-on-year increase of 25.57%; net profit attributable to shareholders was 233 million RMB, a year-on-year decrease of 0.75%; and net profit after deducting non-recurring gains and losses was 194 million RMB, a year-on-year decrease of 6.49%. Revenue increased by over 20%, but profits did not grow synchronously; the core reason still lies in costs and gross profit margins.
During the reporting period, NCE Power's operating costs increased by 36.83% year-on-year, significantly faster than the growth rate of operating revenue. Calculated based on operating revenue and costs, the company's overall gross profit margin was approximately 30.04%, down 5.76 percentage points from 35.80% in the same period last year. In other words, NCE Power sold more products in the first half of the year, but the gross profit retained per yuan of revenue decreased. On the positive side, the net cash flow generated from operating activities reached 212 million RMB, a year-on-year increase of 32.55%, indicating that collections and operating cash flow remain relatively stable.
Silan Microelectronics' financial data presents another contrast. In the first half of 2026, the company achieved an operating revenue of 7.262 billion RMB, a year-on-year increase of 14.62%; net profit attributable to shareholders reached 516 million RMB, a year-on-year increase of 94.84%. The nearly doubled profit growth looks very impressive, but looking further at the non-recurring data, its net profit after deducting non-recurring gains and losses was 271 million RMB, a year-on-year increase of only 0.67%.
The gap between Silan Microelectronics' net profit attributable to shareholders and net profit after deducting non-recurring gains and losses mainly comes from non-recurring income generated by holding stocks, with relevant after-tax income of approximately 194 million RMB. After excluding this factor, the profit improvement of the company's main business is relatively limited. Meanwhile, the gross profit margin of Silan's main business disclosed was 18.90%, a year-on-year decrease of 1.31 percentage points; calculated based on overall operating revenue and costs, the overall gross profit margin was about 18.56%, a year-on-year decrease of 1.86 percentage points. The net cash flow from operating activities was 292 million RMB, a year-on-year decrease of 12.08%, also indicating that revenue growth has not yet fully translated into cash flow improvement.
The situation of CRRC Times Electric needs to be distinguished between the group and the semiconductor business. In the first half of 2026, CRRC Times Electric Group achieved an operating revenue of 13.071 billion RMB, a year-on-year increase of 7.01%; net profit attributable to shareholders was 1.712 billion RMB, a year-on-year increase of 2.44%; and net profit after deducting non-recurring gains and losses was 1.642 billion RMB, a year-on-year increase of 3.43%. The group's overall gross profit margin rose from 32.01% to 32.81%, and overall operations remained relatively stable. However, the power semiconductor business showed a different trend. The semiconductor segment of CRRC Times Electric achieved revenue of 2.699 billion RMB, a year-on-year increase of 11.69%. Its core subsidiary, CRRC Times Semiconductor, achieved an operating revenue of approximately 2.706 billion RMB, a year-on-year increase of 10.91%; net profit was approximately 212 million RMB, a year-on-year decrease of 52.14%. Calculated accordingly, the net profit margin of CRRC Times Semiconductor dropped from 18.11% in the same period last year to 7.82%, a decrease of about 10.30 percentage points.
Since CRRC Times Electric did not separately disclose the gross profit margin of the semiconductor segment, this net profit margin data cannot be directly compared with the gross profit margins of StarPower, NCE Power, and Silan Microelectronics. However, the combination of revenue growth and a sharp decline in net profit at least indicates that the semiconductor business is also facing strong cost and expense pressures. The performance of businesses such as rail transit equipment at the group level has masked some of the profitability fluctuations in the power semiconductor business.
From the revenue perspective, the four companies have not experienced a widespread decline. The semiconductor segments of NCE Power, Silan Microelectronics, and CRRC Times Electric all maintained growth, and StarPower's revenue only saw a slight decrease of 0.41%. This indicates that market demand has moved past the previous comprehensive inventory digestion phase, and fields such as industrial control, AI power supplies, home appliances, and NEVs are still contributing incremental growth.
However, performance on the profit end is noticeably weaker: StarPower's net profit attributable to shareholders dropped by 76.40%, NCE Power saw revenue growth but a slight profit decline, Silan Microelectronics' net profit after deducting non-recurring gains and losses barely grew, and CRRC Times Electric's semiconductor subsidiary's net profit fell by over 50%. Among the three companies with comparable gross profit margin data, the gross profit margins of StarPower, NCE Power, and Silan Microelectronics all declined.
Comparison of Core Financial Data in the 2026 Semi-Annual Reports of the Four Companies. Source: Compiled by eefocus Research Institute based on the 2026 semi-annual reports of each company (Unit: 100 million RMB)
Why Can't Price Increases Save the Gross Profit Margin?
Price increases and gross profit margin declines in power semiconductors are happening simultaneously.
The market usually views price increase notices as a signal of industry prosperity recovery, but price hikes are driven by at least two different forces. One stems from demand improvement and tight supply, giving manufacturers stronger bargaining power; the other comes from rising costs in wafer foundry, packaging and testing, metal materials, energy, and labor, forcing companies to adjust prices to alleviate cost pressures. The former is more likely to bring profit expansion, while the latter is mainly cost pass-through; whether the gross profit margin can rebound depends on whether the price increase can cover the unit cost increment.
The semi-annual reports of the four companies align more closely with the second scenario.
StarPower's operating revenue decreased by 0.41% year-on-year in the first half of the year, while operating costs grew by 12.58%; NCE Power's operating revenue grew by 25.57%, with operating costs increasing by 36.83%. For both companies, the cost growth rate was significantly faster than the revenue growth rate, ultimately resulting in overall gross profit margin drops of 9.16 and 5.76 percentage points, respectively.
The calculation logic for gross profit margin is not complex. When product selling prices rise, but wafer, packaging and testing, and manufacturing expenses rise even faster, the gross profit retained per yuan of revenue will still decrease. For companies using external wafer foundry and packaging and testing resources, upstream price changes will gradually enter inventory costs; for IDM companies with self-built wafer and SiC production lines, depreciation, equipment debugging, yield ramp-up, and personnel expenses will also elevate unit manufacturing costs. The cost sources faced by different manufacturing models vary, but the results may all manifest as increased revenue and decreased gross profit margins.
There is also a time lag in passing costs down to the downstream. Automotive, industrial, and new energy customers usually need to go through processes such as quotation, validation, contract adjustment, and batch introduction, making it difficult for prices to change instantly with costs. When upstream wafer and packaging costs have already entered the financial statements, some terminal prices are still executing previous contracts. Even if manufacturers complete price adjustments later, they may only be able to cover the newly added costs and fail to recover the previously compressed gross profits.
The second variable is product mix.
The power semiconductor market is not one with highly unified prices and profit margins. MOSFETs, IGBTs, SiC devices, power modules, and different voltage platforms differ greatly in technical barriers, customer certification cycles, and competitive landscapes. For the same company with rapid revenue growth, the newly added revenue may also mainly come from products with fierce price competition or relatively low gross profit margins, thereby dragging down the overall gross profit margin.
In the first half of the year, NCE Power's SGT-MOSFET revenue reached 545 million RMB, a year-on-year increase of 28.57%; IGBT revenue reached 196 million RMB, a year-on-year increase of 48.10%. Both types of products jointly drove the company's revenue growth, but the overall gross profit margin still declined. This indicates that the expansion of shipment scale has not yet been fully translated into profit increments; external manufacturing costs, market prices, and product mix are all affecting the final profitability level.
Silan Microelectronics' product mix is more complex. In the first half of the year, the company's discrete device business revenue reached 3.444 billion RMB, a year-on-year increase of 14.50%, but the gross profit margin dropped to 11.17%, a year-on-year decrease of 2.84 percentage points; LED business revenue was 377 million RMB, with a negative gross profit margin of 3.11%. In contrast, its IC (Integrated Circuit) business revenue was 2.976 billion RMB, with a gross profit margin reaching 30.47%. Low-margin businesses maintaining a large revenue scale make it difficult for the IC business to fully drive up the overall gross profit margin.
StarPower is also facing a rebalancing of its business structure. The company's revenue from the new energy industry was 1.019 billion RMB, a year-on-year decrease of 16.02%; revenue from the industrial control and power supply industry reached 710 million RMB, a year-on-year increase of 40.17%. The new energy business still accounts for more than half of the company's revenue, and its scale decline will directly affect overall revenue and capacity utilization rate. Although the industrial control and power supply businesses are growing rapidly, different products are in different introduction stages, with inconsistent price levels and cost structures, making it difficult to fully fill the profit gap left by the new energy business adjustment in the short term.
The third variable comes from downstream cycle divergence.
The price increases in power semiconductors around 2021 were mainly driven by comprehensive shortages, prolonged delivery cycles, and channel hoarding, with consumer electronics, automotive, industrial, and new energy demands releasing intensively in the same stage. The market environment in 2026 is different. NEVs, photovoltaic energy storage, industrial control, home appliances, and AI server power supplies are each in different cycles, with unsynchronized demand strength and inventory levels.
The NEV market is still growing, but complete vehicle price competition will pass upstream along the supply chain, with automakers and Tier 1 suppliers continuously demanding lower component costs. After experiencing inventory and price adjustments, the photovoltaic industry is more cautious in procuring power devices. Traditional industrial control is recovering, but it is difficult to replicate the large-scale increments brought by the high-speed growth stage of new energy in the short term. Demand for AI server power supplies, data centers, and high-end automotive-grade platforms is strong, but these businesses currently account for a still limited proportion of revenue for most domestic power semiconductor companies.
Therefore, price increases in the market are often concentrated on specific products, package types, or models with tight supply, while some mid-to-low-end devices remain in price competition. High-voltage, high-reliability, and automotive-grade products may maintain strong bargaining power, whereas highly standardized MOSFETs, IGBTs, and some module products face more competition from domestic suppliers. Localized price increases cannot quickly elevate the overall gross profit margin of a company with a vast and complex product line.
Four Models Bring Different Profit Performances
Notably, facing similar demand cycles and cost environments, power semiconductor companies may exhibit vastly different profit performances. The manufacturing model determines how costs enter the income statement, while the product mix determines the profitability quality of revenue growth.
Comparison of Manufacturing/Operating Models of the Four Companies. Source: Compiled by eefocus Research Institute based on the annual reports of each company
NCE Power is characterized by an asset-light model. The company mainly undertakes chip design, product definition, supply chain management, and market sales, relying on external foundry resources for wafer manufacturing and other links. This model reduces the large capital investment required for building self-owned wafer fabs and also facilitates the company in adjusting the tape-out scale of different products according to market demand.
The other side of the asset-light model is that cost control capability relies more heavily on the external supply chain. When wafer foundry and packaging and testing prices rise, or market demand recovery drives up the capacity utilization rate, supplier costs will be passed to the product end relatively quickly. If there is a lag in terminal selling price adjustments, NCE Power's gross profit margin will be the first to come under pressure. In the first half of 2026, the company's operating revenue grew by 25.57%, while operating costs grew by 36.83%, which precisely reflects this characteristic.
From the perspective of product mix, NCE Power's SGT-MOSFET revenue reached 545 million RMB, a year-on-year increase of 28.57%, accounting for 46.92% of operating revenue; IGBT revenue was 196 million RMB, a year-on-year increase of 48.10%, with the proportion rising to 16.85%. Traditional trench MOSFET revenue was 275 million RMB, a year-on-year increase of 10.27%; super-junction MOSFET revenue was approximately 102 million RMB. IGBT has become the fastest-growing product line, but SGT-MOSFET remains the main source of revenue, and the company's overall profitability level will still be affected by market price competition for mature MOSFETs.
Regarding SiC, NCE Power continues the route of combining external wafer manufacturing with its own packaging and module capabilities. During the reporting period, the company's SiC MOSFET shipments grew significantly, but it has not yet separately disclosed SiC business revenue, capacity, and profit contributions. This path can reduce fixed asset pressure in upstream manufacturing, but requires relying on product design, supply chain collaboration, and packaging module capabilities to establish differentiation.
Silan Microelectronics adopts a relatively complete IDM model, with business covering chip design, wafer manufacturing, packaging and testing, and terminal devices. Compared to Fabless companies, the IDM model possesses stronger manufacturing autonomy, and after production lines reach a high utilization rate, it is also easier to reduce unit costs through process optimization and scaled production. However, wafer fabs need to continuously bear equipment depreciation, production line maintenance, and technology upgrade expenses, and a complex product mix will also increase the difficulty of capacity scheduling.
Silan Microelectronics' business divergence in the first half of the year is quite typical. The IC business achieved revenue of 2.976 billion RMB, a year-on-year increase of 16.36%, with a gross profit margin reaching 30.47%; discrete device business revenue was 3.444 billion RMB, a year-on-year increase of 14.50%, with a gross profit margin of only 11.17%, a year-on-year decrease of 2.84 percentage points; LED business revenue was 377 million RMB, with a negative gross profit margin of 3.11%. The coexistence of high-margin IC business with low-margin discrete devices and loss-making LED business causes a mismatch between the company's revenue growth and overall gross profit margin improvement.
Silan Microelectronics' investment in SiC has entered the scaled manufacturing stage. The company's 6-inch SiC chip production line has a monthly capacity of 10,000 wafers and is operating near full capacity; the 8-inch SiC production line has a monthly capacity of about 5,000 wafers, with subsequent plans to expand to 10,000 wafers. Automotive IGBT and SiC power module businesses are continuously advancing, and the second-generation SiC MOSFET has also entered applications such as AI power supplies.
In the long term, the 6-inch production line operating near full capacity is conducive to amortizing fixed costs, while the 8-inch SiC may reduce manufacturing costs by cutting more chips per wafer. However, the 8-inch production line requires a long time from equipment introduction and process debugging to yield stabilization. In the capacity expansion phase, depreciation and R&D expenses of the new production line will enter the income statement first, and economies of scale usually take time to gradually materialize after customer projects ramp up in volume.
StarPower's path lies between traditional module companies and IDM companies. The company's past core advantages were concentrated in IGBT chip design, power module packaging, and customer applications; in recent years, it has begun to extend into upstream SiC chip manufacturing. This strategy can enhance the supply guarantee and process control capabilities for key chips, while also changing the original cost structure.
In the first half of 2026, StarPower's R&D investment reached 249 million RMB, a year-on-year increase of 8.32%, and the proportion of R&D investment to operating revenue rose to 12.91%, ranking at a high level among the four companies. The company's self-built 6-inch SiC chip production line has an annual capacity of about 60,000 wafers, equivalent to a monthly capacity of about 5,000 wafers, and is currently still in the stage of improving capacity utilization rate. When the production line has not been fully released, equipment depreciation, engineering personnel, material validation, and yield loss may all elevate unit costs.
StarPower's product mix is further compounded by new energy business adjustments. In the first half of the year, the company's revenue from the new energy industry decreased by 16.02% year-on-year, while revenue from the industrial control and power supply industry grew by 40.17%. The new energy business still accounts for more than half of operating revenue, and its decline will weaken the economies of scale of original production lines and supply chains. Meanwhile, industrial control power supplies, next-generation IGBT modules, and SiC modules require continuous R&D and customer validation, forming a transitional state of "pressure on mature businesses and increased investment in new businesses."
From the perspective of product progress, StarPower's second-generation 750V and 1200V SiC modules have achieved mass production, and the second-generation 1500V SiC modules have also begun batch delivery on the 1000V platforms of leading passenger vehicle customers. Overseas NEV business revenue grew by over 70% year-on-year, indicating that the company is still gaining new growth space. However, there is a cycle from project designation to scaled shipment for automotive-grade projects, and overseas business and new SiC products are temporarily insufficient to offset the profit pressure brought by domestic new energy business adjustments and manufacturing investments.
CRRC Times Electric, on the other hand, is a group-level IDM company. Its semiconductor business is backed by rail transit equipment and electrical system businesses, possessing industrial chain capabilities such as high-voltage IGBT chips, wafer manufacturing, module packaging, and system applications. This model is conducive to forming internal validation of products in rail transit, NEVs, new power systems, and industrial equipment, and entering more high-reliability markets through the group's customer resources.
In the first half of 2026, CRRC Times Electric's semiconductor segment revenue reached 2.699 billion RMB, a year-on-year increase of 11.69%. The company's IGBT production lines maintained full production, and its automotive power module domestic market share was about 14%, ranking second domestically; high-voltage power devices have also begun to receive batch orders from markets such as new power systems and data centers. Its third-generation planar gate and 3.5-generation fine planar gate products have been mass-produced, and fourth-generation trench gate products have entered the sample stage.
Meanwhile, CRRC Times Electric's 8-inch SiC production line is still in the process of stable operation and capacity ramp-up. CRRC Times Semiconductor's revenue grew by 10.91% in the first half of the year, but net profit dropped by 52.14%, with the net profit margin falling from 18.11% to 7.82%. CRRC Times Electric did not separately disclose the specific impact of the SiC production line on profits, so the decline in net profit cannot be entirely attributed to SiC investments. However, during the phase where traditional IGBT production lines are at full capacity, next-generation IGBT process upgrades, and 8-inch SiC capacity expansion are proceeding simultaneously, R&D, depreciation, and mass production preparation expenses will all increase profit pressure.
From Price Increases to Profitability: When Will the Profit Turning Point Arrive?
Judging from the semi-annual reports of the above four companies, there is still a significant time lag between industry prosperity improvement and corporate profit recovery. To determine the true profit turning point, it is necessary to continue observing whether prices, costs, product mix, and SiC production line capacity utilization rate can improve simultaneously.
First, it depends on whether product prices can continuously cover rising costs.
Price increase notices are only the starting point for companies attempting to pass costs down to the downstream. Whether product prices can ultimately be implemented also requires customer negotiation, contract adjustments, and inventory digestion. Especially in the automotive, photovoltaic, and industrial control markets, customer certification cycles are long, and annual price reduction mechanisms and batch purchase discounts are widespread, making it difficult for manufacturers to unilaterally and continuously raise prices.
A more effective observation method is to compare the growth rates of operating revenue and operating costs. StarPower's revenue decreased by 0.41% in the first half of the year, while costs grew by 12.58%; NCE Power's revenue grew by 25.57%, while costs grew by 36.83%. As long as the cost growth rate continues to be faster than the revenue growth rate, the gross profit margin lacks a clear foundation for rebound. Subsequently, only if revenue maintains growth and cost growth begins to slow down, or operating costs remain basically stable while product prices rise, can it indicate that price increases have shifted from cost compensation to profit improvement.
Inventory changes also need attention. Power semiconductor companies usually need to procure wafers, packaging materials, and other raw materials in advance, and there is a certain time lag for costs to enter the income statement. Even if upstream prices stabilize, previously procured high-cost inventory will still be carried forward in subsequent sales processes. The recovery of the gross profit margin may lag behind spot prices and price increase notices, often becoming clearer only after the inventory completes a turnover cycle.
The second indicator is the revenue proportion of high-margin products.
The four companies are currently investing in markets such as automotive-grade IGBTs, SiC devices, high-voltage power modules, AI server power supplies, and industrial control, but the growth in shipments of new products does not equal immediate profit contribution. Early-stage project orders are small in scale, with high R&D, certification, and customer support expenses, and they may even enter the supply chains of leading customers through lower quotations. Only when new products form stable batch deliveries and the revenue proportion continuously increases can product upgrades truly drive the overall gross profit margin.
StarPower's industrial control and power supply business grew by 40.17% in the first half of the year, overseas NEV business revenue grew by over 70%, and the second-generation 1500V SiC modules have also been delivered in batches on the 1000V platforms of leading passenger vehicle customers. In the second half of the year, it needs to be observed whether these businesses can continue to expand and offset the impact of the revenue decline in the new energy industry.
NCE Power's IGBT revenue grew by 48.10%, significantly faster than the company's overall revenue; Silan Microelectronics' IC business gross profit margin reached 30.47%, far higher than its discrete device and LED businesses; CRRC Times Electric has obtained new orders in the fields of high-voltage power devices, new power systems, data centers, and automotive power modules. For these three companies, the key to profit improvement also lies in whether the increment of high-margin businesses can exceed the scale expansion of low-margin businesses.
The third indicator is the capacity utilization rate and yield of SiC production lines.
The SiC market is still in a stage of rapid technological iteration. Upgrading from 6-inch to 8-inch can increase chip output per wafer, but it will also bring higher equipment, process, and yield challenges. The completion of a production line does not mean the formation of effective capacity. Only when wafer input, yield, equipment utilization rate, and customer orders remain stable can depreciation and manufacturing expenses be amortized by more qualified chips.
Silan Microelectronics' 6-inch SiC production line has a monthly capacity of 10,000 wafers and is already near full capacity; its next focus is whether capacity utilization can be translated into stable profits, and the yield performance after the 8-inch production line expands from 5,000 wafers/month to 10,000 wafers/month. StarPower's 6-inch SiC production line has an annual capacity of about 60,000 wafers, and the speed of utilization rate improvement and the volume ramp-up of automotive-grade projects still need to be observed. CRRC Times Electric's 8-inch SiC production line is in the ramp-up phase, and production line stability, customer validation, and scaled delivery will directly affect the semiconductor subsidiary's profit margin.
NCE Power adopts an external wafer manufacturing route, without needing to bear wafer fab depreciation on the same scale, but its profitability relies more heavily on foundry prices, capacity guarantees, and its own product design and packaging module capabilities. The four companies have different SiC paths, but the judgment criteria are similar: how much capacity is truly transformed into qualified products, and how many products have formed sustainable customer revenue.
The fourth indicator is whether net profit after deducting non-recurring gains and losses and operating cash flow can improve.
Net profit attributable to shareholders is easily affected by investment income, government subsidies, and other non-recurring items. Silan Microelectronics' net profit attributable to shareholders grew by 94.84% in the first half of the year, while net profit after deducting non-recurring gains and losses grew by only 0.67%. The difference between the two indicates that judging the recovery of the main business cannot rely solely on net profit attributable to shareholders.
Cash flow can also test the quality of revenue growth. In the first half of the year, NCE Power's net cash flow from operating activities grew by 32.55%, showing relatively stable performance; the net cash flows from operating activities of StarPower, Silan Microelectronics, and CRRC Times Electric decreased by 42.40%, 12.08%, and 21.18%, respectively. Only if companies subsequently show three signals: gross profit margin rebound, growth in net profit after deducting non-recurring gains and losses, and improvement in operating cash flow, will the credibility of the profit turning point significantly increase.
Overall, the first half of 2026 is more like a transitional period for the power semiconductor industry shifting from inventory digestion to structural recovery. Demand for some products has recovered, localized models have begun to see price increases, and high-end automotive-grade, AI power supply, and SiC businesses are also growing. However, within the industry, there are still pressures such as price competition for mature products, new energy demand fluctuations, and rising costs for new production lines.
The profit turning point may appear sequentially across companies and product lines, making it difficult to be comprehensively synchronized like the previous shortage cycle. Companies with higher capacity utilization rates, faster increases in the proportion of high-margin new products, and stronger cost pass-through capabilities are expected to recover profitability first; for companies still in the capacity expansion and yield ramp-up phase, the time for profit realization may continue to be delayed.