We are driving innovation in the global power semiconductor industry, dedicated to advancing the GaN power semiconductor industry and fostering its ecosystem. A power semiconductor is a type of semiconductor device that is used as a switch or rectifier in power electronics and serves as the core component of power supplies. Gallium Nitride on Silicon (“GaN-on-Si”) is a technology of growing gallium nitride crystals on silicon substrates, a combination that leverages the high electron mobility and thermal stability of GaN with the cost-effectiveness and scalability of Silicon, making it ideal for high-power and high- frequency applications. We are the first in the world to achieve mass production of 8-inch Gallium Nitride on Silicon (“GaN-on-Si”) wafers and the only company that offers a full voltage spectrum of GaN-on-Si semiconductor products on industrial scale. In terms of revenue in 2023, we had a market share of 0.2% in the global power semiconductor industry and 0.4% in the power semiconductor industry in China, according to Frost & Sullivan. Additionally, we ranked first among all GaN power semiconductor companies globally in 2023 in terms of revenue, according to the same source. The emergence of renewable energy and compute intensive applications has been transforming the world. This trend leads to a surging demand for more efficient and economical power semiconductors products. GaN, a wide bandgap semiconductor material featuring high frequency and low on-resistance, has become the centerpiece in the ongoing revolution of the power semiconductor industry and is set to accelerate its market penetration. In 2023, the GaN power semiconductors accounted for 0.5% of the global power semiconductor market, and it is expected to constitute 10.1% of the market by 2028. Underpinned by our continual innovation and strong technological expertise, we design, develop and manufacture various types of GaN products, including discrete chips, integrated circuits (“ICs”), wafers and modules. Our products are widely adopted in diverse power supply applications across a broad range of sectors, such as fast chargers and adapters in consumer electronics, battery management systems in renewable energy and industrial applications, LiDAR systems in automotive electronics and power supply units in data centers.
We have adopted an Integrated Device Manufacturer (“IDM”) model that enables in-house control over the entire process from design, manufacturing, packaging, testing and sales of the finished products. As of June 30, 2024, we house the world’s largest GaN power semiconductor production base, with a production capacity of 12,500 wafers per month. Such capacity enables us to capture growing market opportunities with stable supplies, thus nurturing customer confidence. Our advanced mass production technologies also led to an 80% increase in die per wafer and a 30% reduction in single chip cost compared to 6-inch GaN-on-Si wafers, showcasing our cost advantages as well as leadership in the ongoing innovation and commercialization of the GaN products.
Our position at the forefront of the GaN semiconductor industry is solidified by our continuous efforts in innovation and technological advancement. Through long-term dedication to R&D, we lead the market in 8-inch GaN-on-Si process technologies. As of June 30, 2024, we had 319 patents and 430 patent applications in the world, covering critical areas such as chip design, device structuring, wafer manufacturing, packaging and reliability testing. We pioneered the effort in expanding the application of GaN products by working closely with reputable customers in diverse sectors, introducing innovative products and delivering unique value. Leveraging our comprehensive expertise in GaN technologies, we design, develop and manufacture high-performance and reliable GaN discrete chips for various applications across low-, medium- and high-voltage ranges in different packaging options, and our product R&D covers 15V to 1,200V.
Benefiting from our technological leadership and commercialization capabilities, our GaN products have gained wide market recognition, contributing to the development of an ecosystem centered on GaN products. According to Frost & Sullivan, with a revenue of RMB592.7 million in 2023, we ranked first among all GaN power semiconductor companies globally, holding a market share of 33.7%. As of June 30, 2024, our cumulative shipment exceeded 850 million in terms of equivalent GaN discrete chips. Our GaN products gained recognition from customers across various application areas, resulting in a strong revenue growth during the Track Record Period. Our revenue increased by 99.7% from RMB68.2 million in 2021 to RMB136.2 million in 2022, and by 335.2% to RMB592.7 million in 2023. Our revenue increased by 25.2% from RMB308.1 million in the six months ended June 30, 2023 to RMB385.8 million in the six months ended June 30, 2024.
We recorded net losses, adjusted net losses (non-HKFRS measure) and net operating cash outflows throughout the Track Record Period. We had loss for year of RMB3,399.3 million, RMB2,205.5 million and RMB1,101.9 million in 2021, 2022, 2023, and we had loss for the period of RMB579.7 million and RMB488.0 million in the six months ended June 30, 2023 and 2024, respectively. Our adjusted net loss (non-HKFRS measure), which was adjusted by adding back (i) changes in the carrying amount of liabilities recognized for financial instruments issued to investors and (ii) equity-settled share-based payment expenses, amounted to RMB1,080.8 million, RMB1,276.9 million, RMB1,015.6 million, RMB549.0 million and RMB400.0 million in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024, respectively. Our net cash used in operating activities amounted to RMB562.1 million, RMB936.3 million, RMB593.6 million, RMB240.9 million and RMB155.5 million, respectively, in 2021, 2022, 2023 and the six months ended June 30, 2023 and 2024. Our net losses and adjusted net losses (non-HKFRS measure), as well as the net operating cash outflows during the Track Record Period, were primarily due to (i) the significant depreciation of production equipment prior to the realization of economies of scale; (ii) the significant amount of R&D expenses recognized during the Track Record Period; and (iii) the increasing selling and marketing expenses during the Track Record Period. The net losses incurred during the Track Record Period reflect our strategic focus on growth, technological enhancement and the expansion of our product portfolio, all of which pave the way for long-term profitability. We plan to improve our profitability through (i) achieving sustained growth in revenue; (ii) narrowing gross loss margin; (iii) improving operating efficiency; and (iv) improving cash flow performance. While we expect to incur net loss, adjusted net losses (non-HKFRS measure) and net operating cash outflows in 2024, with the growing economies of scale, rigorous cost control measures and ongoing improvements in operating efficiency, we anticipate significant improvements in margins that will underpin our long-term sustained profitability.
Source: InnoScience (02577) Prospectus (IPO Date : 2024/12/18) |