瓦特的未来

InnoScience (Suzhou) HK$38.60-OUTPERFORM Watt’s future Tracy Cuitracy.cui@clsa.com+852 2600 8024 Global No.1 GaN company with fast progress in NEVs and AI servers Penetration of gallium nitride (GaN) may rapidly increase from 0.5% of powersemiconductors in 2023 to 10.1% in 28E to TAM of Rmb50bn. InnoScience is thelargest GaN player globally with pioneering technology. It cooperates with leadingpower IDMs. It has made fast progress in NEVs, AI servers and other non-consumerelectronics applications, which contributed 37% of revenue in 2024. We initiatecoverage at an HK$44.80 target price and Outperform rating. Tony Zhang, CFA+852 2600 7726 Fan Hou+852 2600 7751 Rising GaN demandCompared to silicon, GaN enhances energy conversion efficiency and allows for smaller device size. Frost & Sullivan (F&S) estimates GaN’s TAM to increase toRmb50bn in 2028, driven by increased penetration in new energy vehicles (NEVs),AI, datacentres, humanoid robots, new energy power generation and power grids.WeattributeGaN’spenetrationtoimprovedmassproduction,especiallyforindustrial/automotive-grade products, and enhanced price-performance ratio. 25 April 2025 China Technology Reuters2577.HKBloomberg2577 HK InnoScience is the largest GaN player globally with leading technologyInnoScience is the largest GaN player globally with 34% market share in 2023 as Priced on 24 April 2025HS CEI @ 8,056.9 per F&S. It has a strong R&D team, provided the latest Gen3 GaN technology andis also the first company to mass produce 8’’ GaN-on-Si wafers. It recently won apatent dispute vs Efficient Power Conversion (fourth-largest GaN player), whichshows InnoScience’s strong R&D ability. STMicroelectronics hold 1.4% share oncapacity collaboration with InnoScience, which proves InnoScience’s lead in GaN. Company’s GaN product has seen fast adoption in automotive and AI serversInnoScience achieved design-ins in autos from a number of domestic and foreignautomotive OEMs. For AI servers, InnoScience mass-produced and delivered chipsfor server power supplies to multiple global manufacturers and is actively promotingthe application of GaN chips in GPU DC power conversion. For 2024, we estimate10% of total revenue came from automotive and AI server sales. Global GaN leader; initiate at HK$44.80 target price and Outperform ratingWe forecast a 76% revenue Cagr over 2024-28CL to Rmb8.0bn by 28CL, driven by increasing demand from autos and AI servers, supported by capacity expansion. Wevalue InnoScience based on 6.0x 28CL PS, a discount from its major peer SICC. OurTP is HK$44.80. We initiate at Outperform. Key risks include slower-than-expectedGaN penetration and supply landscape shift amid US tariffs. Lock-up periods forpre-IPO investors will end on 30 Jun 2025 and 30 Dec 2025. Overall61.4Country average53.8GEM sector average60.8*Click to visit company page on clsa.com for details Source: Bloomberg. Trading from Feb-25. Rising GaN demandInnoScience is an integrated device manufacturer (IDM) specialising in GaN power semiconductors, with 33.7% market share as of 2023 as per Frost & Sullivan. Dueto GaN’s wide bandgap, high electron mobility and high switching frequency, weexpect rising demand for the technology to result in GaN accounting for a higherproportion of power semiconductors. GaN is providing anincreasing proportion ofpower semiconductor sales With therapid growth of electrification,the technology and performance oftraditional silicon semiconductors are gradually reaching their limits. As a result,they will soon be unable to meet the demands of emerging applications such as EVs,fastchargingforconsumerelectronics,powermanagementanddatacentres.However, GaN demonstrates superior performance compared to silicon in theseapplicationsduetoawidebandgap,highelectronmobility,highswitchingfrequency, low on-resistance and better resistance to high voltage and temperature. GaN is replacing traditionalsilicon due to superiorperformance GaNchipscaneffectivelyreduceenergyloss,enhanceenergyconversionefficiency,lowersystemcostsandallowforsmallerdevicesize.Industrydevelopments and pain points related to using traditional silicon materials forvarious downstream applications are driving a shift to GaN as a replacement inpower semiconductors. Consequently, GaN power semiconductors have significantgrowth potential. GaN reduces energy loss,enhances energy efficiency,lowers costs and allows forsmaller device size Source: Frost & Sullivan, CLSA GaN should outpace overall and power semiconductor marketIn 2023, the global market size for GaN power semiconductor was Rmb1.8bn by revenue, with a 0.5% market penetration rate in power semiconductors as per Frost& Sullivan. With GaN replacing traditional silicon materials, we expect the globalGaN power semiconductor market to reach Rmb50.1bn by 2028 and raise its shareof the global power semiconductor market to 10.1%. Global GaN powersemiconductor market sizereached Rmb1.8bn in 2023 According to World Semi