In-Depth Analysis of Sanan Optoelectronics' SiC Business Development

Based on collected data and analysis, we now present a comprehensive analysis report on

.

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Sanan Optoelectronics (600703.SH), founded in 2000, is a leading enterprise in China’s compound semiconductor sector, with its main business covering the R&D, production, and sales of LED chips, compound semiconductor materials and devices. The company focuses on epitaxial wafers and chips related to new compound semiconductor materials such as sapphire, gallium arsenide, gallium nitride, silicon carbide (SiC), indium phosphide, and aluminum nitride [0][1].

: The company’s 2025 annual performance forecast shows that the net profit attributable to shareholders of listed companies is expected to be -RMB 200 million to -RMB 400 million, and the net profit after deducting non-recurring gains and losses is expected to be -RMB 750 million to -RMB 850 million, switching from profit to loss compared to the same period last year [1]. Despite this, the company’s stock price has performed strongly, hitting a daily limit (RMB 15.79) on January 16, 2026, with a 32.42% increase in the past year, reflecting the market’s confidence in its long-term development prospects [0][2].

Sanan Optoelectronics adopts a

strategic layout for its SiC business:

Hunan Sanan is one of the few

in China’s silicon carbide industry chain, covering the complete industrial chain of [3]

(as of January 2025):

Capacity Type	Capacity Scale
8-inch SiC Substrate	1,000 wafers/month
8-inch SiC Epitaxy	2,000 wafers/month
8-inch SiC Chip	1,000 wafers/month
12-inch SiC Substrate	Sampling verification for customers completed [3]

Anyifa Semiconductor (Chongqing) Co., Ltd., established in August 2023, is jointly funded by Sanan Optoelectronics (51% equity stake) and STMicroelectronics (China) Investment Co., Ltd. (49% equity stake) [4][5].

:

• Total Investment Scale
  : Approximately RMB 23 billion (USD 3.2 billion)
• Target Capacity
  : Approximately 480,000 8-inch silicon carbide wafers per year
• Product Positioning
  : Automotive-grade SiC power devices (electronic control chips)
• Target Customers
  : Exclusive supply to STMicroelectronics, widely used in high-end fields such as new energy vehicles, industrial power supplies, and energy storage
• Full Production Time
  : Expected to reach full production in 2028 [4][5]

:

Time Node	Key Progress
June 2023	Signing, settlement, and project groundbreaking initiated
September 2023	Official construction commenced
September 2024	8-inch substrate production line of Chongqing Sanan was put into operation
February 2025	8-inch project of Anyifa was officially connected to production line
December 2025	Completed verification of multiple products and entered risk production phase [4][5]

The achievement of the risk production phase marks a key breakthrough for China’s first 8-inch automotive-grade SiC production line [5].

Hunan Sanan’s SiC MOSFET products have achieved mass supply to multiple

:

• Vertiv
  - Data center infrastructure provider
• Delta Electronics
  - Global leader in power management solutions
• Lite-On Technology
  - Optoelectronic semiconductor supplier
• Great Wall Motor
  - New energy vehicle manufacturer
• Flex
  - World-leading manufacturer [6][7]

After integration by customers, the related products are ultimately delivered to downstream core terminal scenarios such as

[6].

In the AR glasses field, the company revealed in September 2025 that it is laying out the AR glasses application market based on its R&D and manufacturing capabilities of

[1].

Industry Chain Segment	Major Enterprises	Sanan Optoelectronics’ Position
Substrate	Tianyue Advanced, Sanan Optoelectronics, Dongni Electronics	IDM full industry chain layout, leading 8-inch capacity
Epitaxy	Sky Realm Semiconductor, Han Tian Cheng	Self-supply, advantage of vertical integration
Devices/IDM	Star Semiconductor, CRRC Times Electric, China Resources Microelectronics	Cooperation with STMicroelectronics, advantages in technology and international channels

Sanan Optoelectronics has established a differentiated competitive advantage in the field of automotive-grade SiC devices through

:

• Technology
  : STMicroelectronics authorized SiC MOSFET process patents and dispatched a team to the factory to optimize yield
• Supply Chain
  : Sanan invested RMB 7 billion alone to build a supporting 8-inch SiC substrate factory, with significant cost advantages
• Market
  : Opened up the international market by leveraging STMicroelectronics’ global customer channels [7]

According to Frost & Sullivan data, the global silicon carbide power semiconductor device market will grow at a

from 2024 to 2030:

• 2024: USD 3.24 billion
• 2030: Expected to reach USD 19.745 billion

:

• Electric Vehicles
  : CAGR 36.1% (largest driving force)
• Home Appliances, Data Centers
  : CAGR 39.2% (fastest growing field)
• Optical Storage, Power Grid, Rail Transit
  : CAGR 20%+ [8]

Despite the rapid development of the SiC business, it remains a

:

Influencing Factor	Impact on Performance
Loss from SiC business	Significant negative drag
Loss from filter business	Negative impact
Reduction in government subsidies	-RMB 200 million (estimated)
Increase in expensed R&D costs	-RMB 80 million (estimated)
Improved profitability of LED business	Partially offsets negative impacts [1][3]

• Supply-Demand Imbalance
  : The silicon carbide industry is becoming increasingly competitive, with a significant “involution” trend [3]
• Price Pressure
  : Adjustment in pricing of precious metal scrap sales led to a decrease in investment income
• Inventory Write-Downs
  : Increase in provision for inventory write-downs for inventory with net realizable value lower than cost [1]
• Unclear Industry Inflection Point
  : Relies on significant growth in downstream core demand as a continuous driving force [3]

• ✅ Anyifa project has entered risk production, with a key breakthrough achieved in the 8-inch automotive-grade SiC production line
• ✅ Onboarded leading customers such as Vertiv, Delta, and Great Wall Motor, verifying product competitiveness
• ✅ Formed strategic complementarity with STMicroelectronics, sharing technology and market resources
• ✅ Emerging applications such as AI data centers bring incremental demand
• ✅ Strong stock price performance, improved market recognition

• ⚠️ SiC business continues to incur losses, profitability yet to be verified
• ⚠️ Industry supply-demand imbalance, fierce competition
• ⚠️ Long capacity ramp-up period (full production expected in 2028)
• ⚠️ Performance forecast shows switch from profit to loss in 2025

Sanan Optoelectronics’ SiC business is in a

. The Anyifa project, a joint venture with STMicroelectronics, has entered risk production, marking a substantive breakthrough for China’s first 8-inch automotive-grade SiC production line. The company has established vertical integration capabilities from substrate to devices, and successfully onboarded global leading customers, laying a solid foundation for future development.

However, the current silicon carbide industry as a whole faces pressure from supply-demand imbalance and price competition, and the drag on profits from the company’s SiC business cannot be completely eliminated in the short term.

. In the medium to long term, with the continuous growth of demand for applications such as new energy vehicles and AI data centers, the SiC industry is expected to enter a period of rapid development. With its full industry chain layout and international cooperation advantages, Sanan Optoelectronics is expected to occupy a favorable position in industry integration.

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[1] NetEase News - Sanan Optoelectronics Releases 2025 Annual Performance Forecast (https://www.163.com/dy/article/KJ5E3FBV05149B0F.html)

[2] Sina Finance - Analysis of Sanan Optoelectronics’ Daily Limit on January 16, 2026 (https://finance.sina.cn/2026-01-16/detail-inhhnqnz4056567.d.html)

[3] NetEase Finance - Analysis of Sanan Optoelectronics’ 2025 Performance Forecast (https://www.163.com/dy/article/KJ41DBTP0512B07B.html)

[4] SEMI/China Big Semiconductor Industry Network - Total Investment of Approximately RMB 23 Billion: Sanan Optoelectronics Discloses Important Progress of Anyifa’s 8-inch SiC Project (https://finance.sina.com.cn/roll/2025-12-25/doc-inhczhsf8858110.shtml)

[5] Third-Generation Semiconductor Industry - RMB 23 Billion! New Progress Disclosed for Anyifa’s Chongqing 8-inch SiC Project (https://finance.sina.com.cn/roll/2025-12-24/doc-inhcwhpr4577244.shtml)

[6] TrendForce Compound Semiconductor - Sanan Optoelectronics Discloses SiC Shipment Progress (https://www.eet-china.com/mp/u4063171)

[7] Eastmoney - STMicroelectronics: Sanan Optoelectronics and STMicroelectronics are Deep Strategic Complementary Partners (https://caifuhao.eastmoney.com/news/20260116223808176633210)

[8] China Galaxy Securities Research Institute - Silicon Carbide Industry Research Report (https://pdf.dfcfw.com/pdf/H3_AP202512221805757784_1.pdf)

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:

The above chart shows:

• Top Left
  : Stock price trend since 2025, rising from RMB 11.5 at the beginning of the year to RMB 15.40
• Top Right
  : Comparison of SiC capacity planning (current capacity vs planned capacity)
• Bottom Left
  : Milestone progress of Anyifa’s 8-inch SiC project
• Bottom Right
  : Distribution of SiC application fields and major customers

The above chart shows:

• Top Left
  : Competitiveness comparison of Chinese SiC manufacturers
• Top Right
  : Global SiC power device market size forecast
• Bottom Left
  : Quarterly financial performance trend of Sanan Optoelectronics
• Bottom Right
  : Analysis of factors affecting 2025 performance