At the dawn of 2026, the power semiconductor industry has sounded the clarion call for an "explosive start". On one front, Luxiao Technology achieved a pivotal technological breakthrough in 8-inch SiC substrates, while Academician Hao Yue's team at Xidian University shattered international records in GaN power devices, accelerating domestic technology's breakthrough of overseas monopolies. On the other, the semiconductor materials sector defied market trends with strong performance, leading stocks hitting daily price limits, as capital continues to pour into third-generation power semiconductor development. The industry is now entering an irreversible wave of high-end upgrades, emerging as the most certain growth driver in the semiconductor sector for 2026. Domestic SiC/GaN technologies are flourishing across multiple fronts. As core components in strategic emerging industries like new energy vehicles, photovoltaic energy storage, and 5G communications, the pace of technological iteration directly determines downstream industries 'upgrade speed and core competitiveness. In January 2026, domestic third-generation power semiconductors (SiC/GaN) achieved concentrated technological breakthroughs, completely breaking the nearly two-decade monopoly of overseas giants like Infineon and Wolfspeed, significantly accelerating the domestic substitution process. In the SiC domain, Luxiao Technology has become one of the year's brightest highlights. Its wholly-owned subsidiary Hefei Luxiao has fully mastered the core technology of 8-inch conductive SiC substrates, proficiently controlling the entire crystal growth process. Key performance parameters such as micro-tube density and surface roughness have reached industry-leading levels, surpassing current global mainstream standards. With a scaled-up manufacturing system already established, the company can directly meet core demands for high-end applications like new energy vehicle electronic control systems and photovoltaic inverters. Notably, Luxiao Technology announced a strategic adjustment to its silicon carbide (SiC) project investment, reducing the originally planned fundraising investment from 1.94 billion yuan to 990 million yuan, with the remaining 950 million yuan allocated to working capital. This decision stems from intensified competition in the 6-inch SiC substrate market and a temporary slowdown in downstream demand. By proactively scaling back low-end production capacity and focusing on 8-inch high-end product development, the company aims to optimize its production structure, mitigate operational risks, and secure a dominant position in the high-end market. Meanwhile, a historic breakthrough has emerged in the GaN field. Academician Hao Yue's team at Xidian University has achieved a groundbreaking technological innovation. Their pioneering "ion implantation-induced nucleation" technique fundamentally transforms aluminum nitride layer growth patterns, successfully converting the previously rough "polycrystalline island" structure into atomically smooth "single-crystal thin films." This advancement reduces device interface thermal resistance to one-third of traditional structures, resolving the global challenge of "thermal bottlenecks" in GaN power devices. Devices fabricated using this technology demonstrate output power densities of 42 W/mm in the X-band and 20 W/mm in the Ka-band, surpassing international performance benchmarks. These achievements have been published in top-tier journals like Nature Communications and Science Advances, providing core technological support for 5G/6G communications, satellite internet, aerospace, and other high-end sectors, while propelling domestic GaN devices into the global forefront. This breakthrough in domestic SiC/GaN technology not only shattered the technological monopoly and production blockade by overseas giants, but also accelerated the domestic substitution of power semiconductors, continuously narrowing the gap with international advanced levels and laying a solid foundation for subsequent large-scale production and market breakthroughs. The sector's explosive growth has driven manufacturers to compete in the high-end market. The continuous implementation of technological breakthroughs has triggered capital enthusiasm and production capacity expansion, creating a dual positive resonance that has officially ushered the power semiconductor industry into a high-growth cycle. Since the beginning of the year, the sector has performed outstandingly, becoming one of the core hotspots in the capital market. From a capital perspective, the sector exhibits distinct characteristics of "sector strength and leading stocks driving gains." On January 16, amid the overall adjustment of the A-share market, semiconductor material concept stocks defied the trend. Tianyue Advanced, a leading silicon carbide company, achieved a 20% limit-up, while Kangqiang Electronics recorded a 10% limit-up. Shanghai Hejing and Shengong Shares saw gains exceeding 7%, with 12 related stocks hitting record highs that day. According to statistics, as of January 23, the semiconductor material sector has achieved an average increase of 21.15% since 2026, significantly outperforming the broader market. Institutional funds have been actively positioning themselves, with core targets like Debang Technology and Haohua Technology receiving unanimous institutional support, with predicted upside potential exceeding 10%. However, the latest market data on January 23 shows divergent trends within the sector: Tianyue Advanced edged up 0.29%, while Kangqiang Electronics dipped 0.43%. Short-term enthusiasm has cooled, but the industry's long-term growth logic remains intact, and capital's willingness to invest in third-generation power semiconductors persists strongly. In terms of capacity expansion, domestic core manufacturers are intensifying strategic investments, focusing on high-end products and core materials to accelerate industrial chain development and seize market opportunities. While Luxiao Technology specializes in large-scale production of 8-inch silicon carbide substrates and optimizing capacity structures, Haohua Technology continues to strengthen its presence in power semiconductor materials. The company currently operates a 5,000-ton annual nitrogen trifluoride (NFT) production line, with the first phase of its 6,000-ton NFT project at the Zigong Yantan base in Sichuan Province (3,000-ton unit) already operational. This product is primarily used in integrated circuit etching and cleaning processes, fully meeting domestic demand for high-end power semiconductor production. Additionally, the 7-billion-yuan Xinqi Advanced Semiconductor project officially launched in Weihai Lingang on January 19, focusing on 6-inch silicon-based power semiconductor chips including MOSFETs and IGBTs. Upon completion, it will address domestic production gaps in power chips and enhance regional industrial chain integration. Meanwhile, the fourth phase of Yuexin Semiconductor's 25.2-billion-yuan project has commenced, specializing in digital-analog hybrid processes tailored for power devices. This initiative promotes coordinated development across the supply chain and boosts overall industry competitiveness. While technological breakthroughs and capital inflows bring significant short-term benefits, domestic manufacturers still face long-term challenges. Current limitations include unstable mass production stability, extended customer validation cycles, and a shortage of high-end R&D talent. The industry must continue increasing R&D investments, optimizing production layouts, and overcoming core bottlenecks. The dual-front competition between global giants and domestic players is intensifying in the power semiconductor industry. While overseas leaders dominate high-end segments, Chinese manufacturers are making breakthroughs in mid-to-low-end markets. However, as domestic technological advancements continue to materialize and production capacity expands rapidly, this entrenched landscape is gradually being disrupted. The rivalry between international titans and Chinese innovators is escalating, further deepening industry polarization. High-end segments remain the core battleground for global players. Industry leaders like Infineon, ON Semiconductor, and Wolfspeed leverage decades of technological expertise, comprehensive supply chain networks, and large-scale production capabilities to dominate over 70% of the global SiC device market. Infineon's SiC wafer plant in Jurin, Malaysia has commenced operations, targeting 30% of the global SiC market share by 2030. Meanwhile, ON Semiconductor has completed its full industrial chain integration from substrate to packaging through GTAT acquisition, with plans to launch 8-inch SiC wafer production in 2025. The company aims for an annual capacity of 600,000 wafers, projecting a market share exceeding 20% within 5-10 years. The domestic substitution of mature technologies (IGBT/MOSFET) is nearing completion, with leading Chinese manufacturers achieving scalable profitability. Domestic core manufacturers such as CRRC Times Electric and Star Semiconductor are capitalizing on the explosive growth of downstream demand in new energy vehicles and photovoltaic energy storage systems. They are steadily increasing market share and optimizing product structures. Currently, the penetration rate of domestically produced IGBTs in the new energy vehicle sector has been progressively rising, with some manufacturers achieving product quality on par with international standards. These companies are also accelerating upgrades to high-end automotive-grade and industrial-grade products, gradually replacing imported alternatives and establishing domestic dominance. The localization process in upstream material sectors is advancing in tandem, serving as a crucial pillar for domestic substitution. As a core component in the power semiconductor supply chain, the localization rate of semiconductor-grade silicon materials has exceeded 50%, while key materials like polishing liquids have surpassed 30%. Companies such as Debon Technology and Haohua Technology, focusing on power semiconductor supporting materials, are making continuous breakthroughs in core technologies and achieving import substitution. Benefiting from the expansion of domestic device production, these enterprises maintain steady growth momentum. Overall, the domestic power semiconductor supply chain is becoming increasingly complete, forming a synergistic development pattern from upstream materials, midstream components to downstream applications, with the overall localization process accelerating at an unprecedented pace.
