The Chinese wide bandgap semiconductor industry started 2026 with two very different speeds. While companies involved in RF GaN are growing strongly thanks to the deployment of 5G base stations, satellite internet terminals, and defense demand, many SiC manufacturers are facing a much more uncomfortable quarter: falling prices, squeezed margins, high depreciation costs, and new capacity that has yet to operate at full efficiency.
This contrast is significant because both silicon carbide (SiC) and gallium nitride (GaN) have been presented for years as essential materials for electrification, telecommunications, solar energy, electric vehicles, and industry. Both offer advantages over traditional silicon in efficiency, temperature, frequency, and power handling, but not all segments mature at the same pace or generate profits with the same ease.
GaN RF: 5G, satellites, and defense drive growth
According to TrendForce, Chinese companies most exposed to GaN RF were the biggest winners in the first quarter of 2026. The most notable case is Sinopack, which recorded a 79.05% year-over-year revenue increase, mainly driven by its GaN RF devices business through its subsidiary. The company has achieved high-volume shipments for macro 5G base stations and satellite internet terminals, and has also benefited from increased defense electronics orders.
GaN RF makes sense in these applications because it allows operation at high frequencies with good efficiency and power—two crucial conditions for mobile networks, radars, satellite communications, and advanced radio systems. Unlike some power businesses more sensitive to electric vehicle cycles, the deployment of telecom infrastructure and military applications can offer a more stable demand for well-positioned suppliers.
Additionally, Sinopack is starting to build a second growth avenue in power SiC. Its devices are already in mass supply for onboard chargers (OBC) in prominent automakers. This illustrates how the boundary between GaN and SiC is not always a clean divide: some companies are trying to cover multiple chain points to avoid dependence on a single application.
Yangjie Technology also had a positive quarter, supported by advances in automotive-grade SiC devices. Its first SiC chip line is now in mass production, covering voltage platforms from 650 V to 1,700 V. Furthermore, its power module encapsulation project for automotive applications has started operations and secured orders from several Tier 1 suppliers. With the expansion of 800 V electric platform markets, the company saw SiC-related revenues grow over 50% year-over-year.
AMEC is another favorable case, though with some nuances. Its net profit grew by 197.20% year-over-year, but this figure includes an extraordinary gain of about 397 million yuan from the sale of its stake in Piotech. Even excluding non-recurring effects, the business remained strong, with a 60.09% increase in recurring net profit. The company maintains a prominent position in MOCVD equipment for GaN in China and benefits from capacity expansions in GaN RF, Mini LED, and power devices.
| Company | Main Segment | Notable Q1 2026 Development |
|---|---|---|
| Sinopack | GaN RF and SiC OBC | Revenue +79.05% YoY |
| Yangjie Technology | Automotive SiC | SiC revenue +50% YoY |
| AMEC | MOCVD equipment for GaN | Net profit +197.20% YoY |
| SICC | SiC substrates | Net loss of 60.51 million yuan |
| San’an | LED, SiC, and RF | Decline in revenue and profit |
| StarPower | Modules and chip manufacturing | Net profit -74.32% YoY |
SiC pays the price for rapid growth
The less favorable aspect of the quarter appears in SiC substrates and devices. Demand for SiC still has a solid base in 800 V electric vehicles, photovoltaic energy, and industry, but profitability is deteriorating due to tough combination of price competition, new lines still ramping up, and high asset depreciation.
SICC, one of China’s major SiC substrate suppliers, went from profit to a net loss of 60.51 million yuan in Q1. Revenues fell by 10.41% YoY. The main reason is price pressure: 6-inch substrates fell over 30% YoY. Meanwhile, the deployment of 8-inch lines increased unit costs and kept gross margins negative.
This does not mean the business is dead. Combined shipments of 6- and 8-inch substrates grew by 3.58% compared to the previous quarter. If capacity utilization rises and manufacturing yields improve, profitability could recover. But the quarter leaves a clear warning: moving from 6 to 8 inches is not only a technical upgrade but also entails high costs before scale begins to generate benefits.
San’an is experiencing a particularly tough transition. Its traditional LED business continues to be affected by weak demand and falling prices, with revenues down over 40% YoY. Meanwhile, new sectors like SiC substrates and RF filters are still expanding capacity. The SiC plant in Hunan bears high depreciation costs, and customer qualification cycles, especially in automotive, prolong the path to profitability.
StarPower Semiconductor also faced expansion costs. Revenues declined 6%, and net profit dropped 74.32%. The main drag was its chip manufacturing subsidiary, where several lines came into operation but remain in early stages. Depreciation expenses increased by 75.43 million yuan, along with higher amortization of fixed assets. Softer demand in electric vehicles in the short term and slight price drops in SiC modules compounded margin pressures.
A strategic technology, but with natural selectivity
The divergence between GaN and SiC does not invalidate the importance of wide bandgap semiconductors. On the contrary, it confirms that the market is entering a more selective phase. Producing SiC or GaN alone is no longer enough to grow. The final application, technological maturity, customer quality, wafer cost, manufacturing yield, and certification ability all matter.
In GaN RF, short-term prospects look more favorable due to 5G, satellite communications, and defense. In SiC, structural demand remains supported by 800 V EVs, industrial photovoltaics, chargers, inverters, and power systems, but companies that cannot control costs or achieve good yields may suffer. Price pressure on substrates will likely continue to favor scaled players with technical advantages and pre-certified customers.
The industrial outlook for China is clear. The country sees GaN and SiC as pathways to narrow the gap with global leaders in areas where traditional silicon does not dominate all advantages. Industrial policy, domestic demand, and the push to replace imports will continue to boost investment. But initial enthusiasm is giving way to a tougher market, where installed capacity does not always translate into profit.
For Europe and the US, the Chinese case also serves as a warning. Semiconductor independence is not just about announcing fabs or funding pilot lines. It requires mastery of materials, substrates, epitaxy, encapsulation, automotive certification, manufacturing equipment, and industrial clients. Especially in SiC, capacity expansions can lower prices if demand does not absorb supply at the expected rate.
Yole Group’s report on power SiC and GaN forecasts continued growth towards 2031, with SiC as the largest segment and GaN gaining importance in power applications. This aligns with the core of the Chinese quarter: the technology has potential, but profits will accrue to those combining scale, quality, industrial performance, and early access to automotive, telecom, and industrial customers.
China is not reversing its commitment to wide bandgap semiconductors. It is entering a less comfortable phase. GaN RF now benefits from clearer demand and more visible margins. SiC, however, must demonstrate that it can turn investment, capacity, and electrification promises into sustained profitability.
Frequently Asked Questions
What are wide bandgap semiconductors?
Materials like silicon carbide (SiC) and gallium nitride (GaN) capable of operating under high voltages, temperatures, and frequencies more efficiently than silicon in certain applications.
Why is GaN RF growing in China?
Because it is experiencing demand from 5G base stations, satellite internet, defense, and advanced RF systems. These applications require high efficiency and good performance at high frequencies.
Why is SiC suffering despite growth in electric vehicles?
Because capacity expansion has increased depreciation and costs, while price competition has lowered prices, especially for 6-inch substrates. 8-inch line utilization and yields still need improvement.
Which Chinese companies stand out in this market?
TrendForce highlights Sinopack, Yangjie Technology, and AMEC as the companies showing the best performance this quarter, while SICC, San’an, and StarPower face more margin and profit pressure.
via: trendforce