Global leader Wolfspeed files for bankruptcy; Tianyue Advanced and Tianke Heda both report losses. How long will the silicon carbide substrate market continue to compete fiercely?

Produced by: Sina Finance Listed Company Research Institute

Author: Guangxin

On the evening of March 27, 2026, Tianyue Advanced released its 2025 annual report. The company achieved a total revenue of 1.47B yuan for the year, a decrease of 17.15% year-on-year, and a net loss attributable to shareholders of 208 million yuan, turning from profit to loss.

However, the market’s reaction to the annual report was quite positive. After the release, the company’s stock price rose for three consecutive trading days, with a total increase of 10.94% by the close on April 1.

From major financial forums, most bullish investors focus on production and sales data. In 2025, the company’s silicon carbide substrate production volume was 690.4k pieces, up 68.31% year-on-year, and sales volume was 633.3k pieces, up 54.90%.

Regarding the reasons for the decline in performance, the company stated that mainly the average price of silicon carbide substrates decreased, leading to a drop in revenue and gross profit, compounded by increased sales and R&D expenses, as well as higher income tax expenses and late payment penalties.

Calculating the unit price using the formula “silicon carbide substrate revenue / sales volume,” Tianyue Advanced’s single-chip price has fallen from 4,080 yuan per piece in 2024 to 2,304 yuan per piece, a decline of 56%.

Whether the company actively lowered prices to compete for market share or passively joined price competition, this decline appears quite brutal. Coupled with the news that Wolfspeed, a global pioneer and absolute leader in silicon carbide, filed for bankruptcy, the silicon carbide substrate market in 2025 was indeed bloodied and chaotic.

**　　Recent years have seen fierce price wars in downstream fields, with competitors like Tianke Heda suffering losses for many years**

Silicon carbide (SiC), as a typical third-generation semiconductor material, has physical advantages such as a wide bandgap, high breakdown electric field, and high thermal conductivity compared to traditional silicon-based (first-generation semiconductor) and compound (second-generation semiconductor) materials like gallium arsenide and indium phosphide. It is regarded as an ideal material for high-voltage, high-temperature, and high-frequency applications, currently mainly used in various industrial scenarios.

According to estimates by Forrester and Sullivan, within the current and upcoming five years, xEv (electric vehicles, hybrid vehicles, broadly categorized as new energy vehicles) will be the main application field for silicon carbide, accounting for over 70% of the market share.

Estimate of silicon carbide market size in various fields from 2019 to 2030 (Source: Forrester and Sullivan)

In recent years, new energy vehicle companies have been embroiled in intense competition. The price war in the automotive market in 2025 was particularly brutal, with layered subsidies for replacement, scrapping, and manufacturer incentives. Many models offered unprecedented low prices. Coupled with rising raw material costs, the cost constraints for new energy vehicle companies tightened, impacting the upstream silicon carbide industry.

According to brokerage research reports, the leading domestic N-type silicon carbide substrate suppliers are Tianyue Advanced and Tianke Heda, with global market shares of 17.3% and 17.1%, respectively, totaling 34.4%, surpassing Wolfspeed, the top global silicon carbide substrate company.

Global revenue share of N-type silicon carbide substrate suppliers in 2024 (Source: brokerage research reports)

However, as price wars deepen in 2025, Tianyue Advanced’s net profit attributable to shareholders turned negative again, and its competitor Tianke Heda also faced difficulties.

Tianke Heda, officially “Beijing Tianke Heda Semiconductor Co., Ltd.,” was established in September 2006 by Xinjiang Tianfu Group and the Institute of Physics, Chinese Academy of Sciences. It was founded four years earlier than Tianyue Advanced and is one of the earliest companies in China engaged in silicon carbide semiconductor R&D.

In May 2017, Tianke Heda was listed on the New Third Board, but it delisted in August 2019. Afterwards, it attempted to list on the STAR Market; its application was accepted by the Shanghai Stock Exchange in July 2020, but in October 2020, the review status was updated to “terminated,” marking the failure of its listing attempt.

Financial data disclosed during its listing period shows that, from 2018 to 2019, its revenue was lower than Tianyue Advanced’s, but it had already achieved profitability, with a net profit attributable to shareholders of 30.04 million yuan in 2019, compared to Tianyue Advanced’s -201 million yuan in the same period.

There are signs that Tianke Heda has also suffered continuous losses in recent years.

According to the financial report of Tianfu Energy, the second-largest shareholder of Tianke Heda, from 2022 to the first half of 2025, Tianke Heda, as a long-term equity investment, recognized gains and losses of -6.6 million yuan, 8.36 million yuan, -19.49 million yuan, and -14.09 million yuan, respectively, under the equity method. During this period, Tianfu Energy held 9.09% of Tianke Heda, meaning Tianke Heda’s profits/losses for each period were approximately -72.63 million yuan, 91.94 million yuan, -214 million yuan, and -155 million yuan. In just over three and a half years, it only turned a profit once, with recent losses exceeding 690.4k yuan, indicating severe cash outflows.

**　　Overseas industry leader files for bankruptcy; auto companies’ price war reverses; is there a spring for silicon carbide?**

In May 2025, according to U.S. media reports, Wolfspeed is working with bankruptcy advisors to file for bankruptcy protection within weeks and is seeking solutions to its massive debt.

Following this news, Wolfspeed’s stock price plummeted 60% overnight, ranking first among U.S. stock declines.

Wolfspeed’s predecessor, Cree, was founded in 1987, initially focusing on silicon carbide-based blue LED products. Later, it launched the world’s first commercial silicon carbide wafer, making it a pioneer in silicon carbide.

As its lighting business declined, Cree spun off its LED division in 2016 and officially renamed itself Wolfspeed in October 2021, fully transitioning into a third-generation semiconductor company.

Between 2021 and 2024, Wolfspeed expanded rapidly by building new factories, but this coincided with the underwhelming electrification of the European and American auto markets. Orders from automaker clients sharply decreased, turning its capacity advantage into depreciation burdens. Facing ongoing massive losses, Wolfspeed ultimately announced bankruptcy restructuring.

Market opinions suggest that the homogeneity of silicon carbide substrate products leads to price competition, and China’s manufacturers’ price advantages in global competition are a key factor behind Wolfspeed’s insolvency.

Currently, Wolfspeed’s poor performance and shrinking capacity utilization will further impact economies of scale, increase costs, and weaken product price competitiveness. This may create opportunities for Chinese manufacturers to reshape the global silicon carbide substrate market landscape.

On the other hand, China’s new energy vehicle market has recently undergone a strategic “U-turn.” Over the past few years, car companies that believed in “price for volume” are now collectively raising prices.

According to incomplete statistics, as of March 29, 2026, more than 15 new energy vehicle companies have announced price increases or reduction of discounts, with increases ranging from 2000 to 20k yuan.

This round of price adjustments mainly targets the 100k-200k yuan market, with increases of 3%-5%; the 200k-300k yuan market sees increases of 2%-4%; high-end markets above 300k yuan see 1%-3% increases; and entry-level cars below 100k yuan continue to maintain discounts, following a volume-driven strategy.

Notably, this round of price hikes appears to be driven more by cost factors.

Recently, lithium prices have surged. UBS estimates that rising lithium carbonate prices have increased per-vehicle costs by 3,000 to 5,000 yuan. Additionally, AI’s significant occupation of automotive-grade chip capacity and increased storage chip costs have raised the cost of vehicle intelligence by 2,000 to 3,000 yuan. Meanwhile, the exemption from vehicle purchase tax has been phased out, and local subsidies have been tightened, making price increases a reluctant move to maintain profitability.

In this context, what will happen to silicon carbide companies whose product prices have already been halved? Only time will tell.