Power IDM

Let me sit here and share my view on the next two quarters. Looking at this four-quarter curve, gross margin fell from 19.6 to 18 in 2025 Q2 and Q3, then dropped straight to 16.7 in Q4, with operating profit slamming down to negative 50-something million—those days were honestly tough. The main culprits: consumer electronics was still in destocking, utilization on the legacy lines couldn't climb, and discrete device pricing was getting hammered by competition. But then you see 2026 Q1—revenue jumped to 3.52 billion in one shot, gross margin recovered to 19.8%, and operating profit leapt to 183 million. This is the inflection point I've been waiting for. Two core assumptions drive my view. First, the 8-inch SiC production line starts contributing revenue at small scale in Q2, then ramps further in Q3. SiC MOSFET ASPs run several times those of traditional silicon-based discretes, so once the product mix upgrades, gross margin naturally moves higher. Second, MCU and IPM modules continue to scale—we've been pivoting from a "discrete-led" model toward "main-controller + power," a bet we've made for three years, and this year we're finally seeing the payoff come back. My forecast—Q2 revenue 3.65 billion, net income 238 million; Q3 revenue 3.78 billion, net income 270 million—is built along this line. The growth rate isn't aggressive, but every step has corresponding production lines and orders behind it. That said, I have to call out the biggest risk: depreciation on the 8-inch SiC line is heavy. We've sunk several billion into it, and if the Q3 ramp falls short of expectations, depreciation will directly eat into the gross margin improvement—this is the one thread I'm watching tightest right now. On top of that, the domestic mature-node price war hasn't let up. Peers are all expanding capacity, and if demand lags supply after Q3, discrete device pricing may come under renewed pressure. So those two forecast numbers are calculated under a "smooth capacity ramp + mild demand recovery" scenario. If any link in that chain breaks, that 7.6% sequential net income growth in Q3 will likely need to be discounted. But looking at the foundation Q1 has laid down, I'm confident I can carry this line forward.