BASICSEMI (09971) released its first interim report: Gross profit margin turned positive against the trend, and industrial modules surged by 2825%.

Driven by global energy transformation and the computing power revolution, silicon carbide (SiC) has become the ideal choice for power devices in fields such as new energy vehicles, photovoltaic energy storage, and AI data centers, thanks to its excellent physical properties, including high breakdown electric field, high thermal conductivity, and high electron saturation drift velocity. In the first half of 2026, demand for SiC power devices was spurred by the construction of AI computing power, mass production of 800V high-voltage platform models, and the expansion of photovoltaic storage installations. However, industry competition intensified, leading to an ongoing price war, with many peers still trapped in negative gross margins. Against this macro backdrop, BASICSEMI (09971), a leading domestic player in the silicon carbide power device sector, released its first report since going public. During a period when the industry faced widespread gross margin challenges, BASICSEMI not only achieved steady revenue growth but also made a historic leap from negative to positive gross margin, establishing its benchmark status in the silicon carbide sector. Steady revenue growth and a critical turning point in gross margin It was noted that during the reporting period, the company's operating income increased by 15.5% year-on-year; overall gross margin improved significantly from -28.8% to 2.8%, a rise of 31.6 percentage points, marking a milestone in turning gross margins positive in the silicon carbide power device sector. In a context where the industry still languishes in negative gross margins, the significance of this figure is evident. Losses narrowed by 8.8% year-on-year; adjusted net losses decreased by 15.1% year-on-year. This not only indicates numerical improvement but also signifies a substantial turning point in the company's operational qualityvalidating the path to profit improvement amid fierce price competition in the silicon carbide industry and serving as an industry benchmark. How did the gross margin turn positive? The secret lies in the dual optimization of product structure and customer structure. A deep analysis of the changes in revenue structure reveals that BASICSEMI is actively optimizing its product mix to respond to the cyclical fluctuations of different market segments. During the reporting period, silicon carbide discrete devices became a new growth engine, with their revenue proportion of total revenue increasing from 9.6% in the same period last year to 21.6%. Notably, SiC MOSFET revenue grew by over 580% year-on-year, primarily due to accelerated adoption of these products in renewable energy, industrial applications, AI data centers, and consumer electronics. Silicon carbide power modules accounted for 25.4% of total revenue. Although automotive-grade modules experienced a decline in revenue due to price reductions and a strategic reduction in sales of low-margin products, proactive resource reallocation has resulted in a revenue structure of higher profitability qualityindustrial-grade modules saw explosive growth, with revenue surging by 2825.1% year-on-year. Compared to automotive-grade products, industrial-grade modules require fewer chips and packaging materials, leading to inherently superior gross margins at similar sales levels, and their rapid volume increases directly boosted overall gross margins. At the same time, the customer structure is also undergoing positive changes. The company actively selects high-quality customers, expanding its customer base from a few leading clients to a broader clientele, resulting in more diversified and stable revenue sources. On the upstream supply chain side, measures such as centralized bargaining, introduction of second suppliers, and domestic alternatives have generally driven down procurement costs for external wafers and key materials. Some production material procurement costs have decreased by over 30%, providing robust support for cost control and gross margin improvement. The synergy of shifting product structures towards high-margin areas, diversifying customer bases, and continuously optimizing supply chain costs collectively pushed the gross margin above the break-even point, validating the effectiveness and foresight of the companys "quality growth" strategy. New scenarios open growth extremes, expanding the application landscape If the positive gross margin is BASICSEMI's "financial report," then its positioning in application scenarios outlines a longer-term growth narrative. AI data centers are a burgeoning new scenario. Demand for AI computing power is driving the upgrade of data center power supply structures towards high-voltage direct current, making silicon carbide a necessity rather than an option. During the reporting period, BASICSEMI products were adopted in the AI data centers of leading domestic telecommunications operators, supporting the localization and green low-carbon operation of intelligent computing clusters. Industrial-grade silicon carbide power modules have accumulated over 30,000 orders in the electroplating power supply sector, with continued demand in renewable energy scenarios such as photovoltaics and energy storage. The Siasun Robot&Automation space represents BASICSEMI's latest strategic move. At the 2026 World Siasun Robot&Automation Conference, BASICSEMI officially signed a strategic cooperation agreement with UBTECH ROBOTICS, the "first humanoid robot stock." The two parties will conduct in-depth cooperation on the application of silicon carbide power devices in the field of embodied intelligent humanoid robots, developing low-power, high-endurance solutions for scenarios like power management and motion control. Notably, BASICSEMI will deploy UBTECH ROBOTICS humanoid robots on its silicon carbide production line, co-building a demonstration line for semiconductor manufacturing applications. The integration paradigm of "third-generation semiconductors + embodied intelligence" not only opens new market spaces but is also expected to enhance manufacturing efficiency. The overseas market is also breaking through simultaneously. Automotive-grade silicon carbide power modules have secured new points for overseas complete vehicle projects with top-tier suppliers in Europe; an international leading electrical company employing industrial-grade silicon carbide power modules has entered the testing phase for solid-state circuit breakers. Silicon carbide discrete devices have also achieved batch deliveries for photovoltaic inverters overseas. BASICSEMI continues to make strategic moves post-IPO, with emerging strategic depth Notably, less than two months after its IPO, BASICSEMI has executed its strategic moves in a tight and orderly fashion. In terms of technology upgrades, less than a month after going public, the company announced a strategic cooperation with Hanlei Technology to accelerate the development and mass production of 8-inch silicon carbide wafers. The industry is currently at a critical transition period from 6-inch to 8-inch wafers8-inch substrates have a 78% larger surface area than 6-inch ones, allowing for 1.8 to 2 times the number of chips per wafer, and reducing per wafer costs by 35%. Companies that gain an early foothold in the 8-inch space are likely to take the lead in the next round of cost competition. In the realm of capital operations, on the same day as the earnings announcement (August 28), the company convened an extraordinary shareholders meeting to review and approve five special resolutions, including general authorization for share repurchase, H-share equity incentive plans, and general authorization for issuing H-shares, all of which passed unanimously. According to a previous announcement, the company intends to repurchase no more than 10% of the total H-shares issued during the authorized period, using internal resources to maintain corporate value and shareholder interests. Meanwhile, the limit for the H-share equity incentive plan is set at 10% of the total shares issued, aimed at providing eligible participants with opportunities to acquire equity interests in the company, incentivizing the core team to enhance the company's long-term value. The repurchase conveys a value signal to the market, while incentivizing long-term interests for the teamthese two initiatives running parallel express management's confidence in the company's future and reserve organizational momentum for transitioning from profit quality improvement to "sustained growth." In summary The valuation logic of the silicon carbide industry is undergoing profound reshapingmarkets no longer pay a premium for mere capacity expansion stories, and future valuation differentiation is expected to be more pronounced than ever. In this round of systematic switching, BASICSEMI has executed precise "strategic calibration": positioning for the next generation of cost competition through 8-inch technological upgrades, building a profit base through industrial-grade market volume, and opening long-term prospects via mass deliveries in the automotive market. The positive gross margin is the first milestone on this strategic pathway. It is particularly noteworthy that this mid-term report was delivered without utilizing the funds raised from the IPOduring a relatively constrained financial phase, the team achieved the critical turning point of gross margin positivity through execution alone, which itself strongly validates the company's strategic determination and operational capabilities. Once the IPO funds are in place, capacity expansion, technological iteration, and global market expansion will receive more robust resource support. As the industry gradually sheds the ephemeral narratives, what will ultimately remain on the valuation table will be those enterprises that truly possess self-sustaining capabilities and strategic depth. What BASICSEMI has demonstrated is not only a feasible path driven by profit quality towards growththis road is just beginning.