Recently, STMicroelectronics and X-FAB released their third-quarter financial reports. Epiworld International also issued a positive profit alert. Driven by strengthening demand, multiple indicators for these companies showed positive trends:
Epiworld International: Projected revenue of approximately CNY 1.7 billion in 2026, representing a year-over-year increase of 110%-130%, with net profit surging 800%-1217% year-over-year.
STMicroelectronics: Order volumes increased quarter-over-quarter; SiC revenue grew by approximately 20% year-over-year this year, with SiC business revenue expected to recover to CNY 7.5 billion by 2027.
X-FAB: Third-quarter orders reached the highest level in two years, and SiC wafer sales hit a record high, up 45% year-over-year.
01 Epiworld International: AIDC Demand Growth Drives Order Increases
On November 2, Epiworld International (02726.HK) released a positive profit alert. The announcement stated that based on a preliminary review of unaudited management accounts for the first ten months, they project fiscal year 2026 operating revenue of CNY 1.607–1.760 billion, representing a year-over-year increase of 110%-130% compared to CNY 765 million in fiscal year 2025.
Regarding net profit, Epiworld International expects it to reach CNY 108–158 million this year, a significant year-over-year increase of 800%-1217%; adjusted net profit is projected at approximately CNY 281–331 million, up 42%-67% year-over-year.
Looking at historical data, Epiworld International has experienced clear cyclical fluctuations in performance. After reaching a peak revenue of CNY 1.143 billion in 2023, the company faced continuous pressure due to industry inventory digestion and price wars, until projected revenue and net profit both hit historic highs in 2026, demonstrating a typical "deep squat and jump" pattern.
Epiworld International stated that the anticipated significant improvement in performance is primarily driven by an explosion in downstream demand. The board mentioned that growth in application demand from AI data centers directly boosted order volumes and sales of the company's silicon carbide epitaxial wafers, thereby driving a substantial rise in revenue.
It is understood that among the world's top five SiC power device manufacturers, Epiworld International has established partnerships with four, all of which have entered NVIDIA's AIDC supply chain.
Moreover, as the company expands its production and sales scale, the dilution effect of fixed costs has begun to manifest.
Epiworld International's interim report disclosed that as of the end of June 2026, their monthly capacity exceeded 60,000 wafers, with capacity growing by approximately 20% within half a year. Once equipment arrives in the second half of 2026, 8-inch capacity is expected to release rapidly further.
Additionally, future incremental growth is noteworthy. Epiworld International's 8-inch silicon carbide epitaxial wafer base in Penang, Malaysia, commenced full-scale construction in August this year. The base plans for an annual capacity of 400,000 wafers, targeting trial production in the second half of 2027.
In terms of product structure, sales of Epiworld International's 8-inch products in the first half of the year already exceeded the total volume for the entire year of 2025, with procurement customers increasing to 35; 12-inch products also achieved small-batch order breakthroughs in the first half of the year.
02 STMicroelectronics: SiC Business Revenue Grows Approximately 20% in 2026
On October 29, STMicroelectronics released its third-quarter 2026 financial report, highlighting several impressive performances.
During the reporting period, the company's revenue was USD 3.76 billion (approximately CNY 25.25 billion), up 17.9% year-over-year; gross margin was 37.3%, operating profit was USD 367 million, and net profit was USD 291 million.
Regarding AI data centers, driven by the growth momentum in this segment, STMicroelectronics raised its 2026 forecast for data center-related revenue to approximately USD 1.3 billion, maintaining its target of "well over USD 2 billion" for 2027. This growth is primarily driven by silicon photonics ICs, electronic ICs, microcontrollers, and power solutions.
Although the automotive segment remained flat quarter-over-quarter, it remains STMicroelectronics' core revenue source, contributing 35% of total revenue this quarter, up 5% year-over-year. Its stable position is mainly driven by dedicated ICs and sensors for core applications, electric drive systems, and ADAS.
During this earnings call, STMicroelectronics clarified the development status of its silicon carbide business. Management noted that SiC business revenue is expected to grow by approximately 20% in 2026. The main growth driver comes from the European electric vehicle (EV) market, and this trend is expected to continue next year.
Beyond automotive, management also pointed out that applications requiring high-power conversion in data center power supplies and industrial markets represent new directions for diversified growth in the SiC business.
Earlier, at an investor conference in September this year, regarding SiC industry demand and future growth, STMicroelectronics explicitly predicted based on secured projects and orders that revenue would recover to EUR 1.01 billion (approximately CNY 7.54 billion) in 2027.
From STMicroelectronics' perspective, the improvement in profitability of the SiC business is directly linked to the transition to 8-inch wafers, as larger wafer sizes allow them to reduce unit costs.
It is understood that STMicroelectronics' current SiC-related capacity layout mainly involves two key bases: Catania, Italy, and Chongqing, China. The former is building a fully vertically integrated 8-inch silicon carbide campus covering the entire process from substrate manufacturing to front-end processing; the latter focuses on front-end manufacturing of 8-inch SiC devices in partnership with Sanan Optoelectronics.
STMicroelectronics CFO Lorenzo Grandi mentioned that the migration from old lines to new lines will be key to improving the company's gross margins, but time is needed to complete customer qualification for products on the new wafer size. In other words, the pace of the 8-inch wafer transition and customer qualification progress are likely key variables affecting the realization of future profitability in the company's SiC business.
Regarding expectations, based on confidence in the recovery momentum, STMicroelectronics forecasts fourth-quarter net revenue of USD 4.15 billion, up 10.5% quarter-over-quarter and 24.7% year-over-year. Based on this calculation, STMicroelectronics' full-year 2026 revenue is approximately USD 14.5 billion, up 22.8% year-over-year.
03 X-FAB: SiC Wafer Sales Hit Record High
On October 29, X-FAB released its third-quarter 2026 financial report, where the silicon carbide/gallium nitride business segment performed notably.
According to the financial report, X-FAB's revenue for this quarter was USD 194.4 million (approximately CNY 1.3 billion), down 15% year-over-year and 3% quarter-over-quarter; EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was USD 37.5 million, down 30% year-over-year but up 12% quarter-over-quarter.
The three core markets—automotive, industrial, and medical—together contributed revenue of USD 187.8 million, down 13% year-over-year but up 3% quarter-over-quarter, accounting for 94% of total revenue.
During the reporting period, X-FAB's wide-bandgap semiconductor business showed particularly prominent growth, with revenue reaching approximately USD 16.2 million (approximately CNY 109 million), up 68% year-over-year and 52% quarter-over-quarter.
Among these, SiC contributed the majority of X-FAB's wide-bandgap revenue. During the reporting period, X-FAB's SiC wafer sales hit a record high, increasing by 45% year-over-year.
According to disclosures by X-FAB executives during the earnings call, approximately 50% of the company's silicon carbide revenue comes from the industrial sector, and 85% of that industrial revenue is from data centers, meaning data centers account for approximately 42.5% of the company's total SiC revenue; new energy vehicles account for about 25%, and the remaining ~25% is from other applications.
X-FAB executives stated that silicon carbide demand from new energy vehicles remains volatile, primarily due to disruptions from one Chinese customer. How the automotive business evolves next quarter still requires continued observation. Conversely, data center growth is very robust, and they expect this growth to continue, with visibility extending into 2027.
According to X-FAB's financial reports, the company's silicon carbide wafer foundry business exhibited an inverted V-shaped trend of "initial rapid growth followed by significant decline" between 2020 and 2025.
X-FAB's silicon carbide revenue started at USD 21 million (approximately CNY 151 million) in 2020, rising strongly to USD 33.8 million (approximately CNY 243 million) in 2021 and USD 54.5 million (approximately CNY 392 million) in 2022, peaking at USD 72.6 million (approximately CNY 523 million) in 2023.
However, since 2024, X-FAB's silicon carbide revenue declined, dropping to USD 51 million (approximately CNY 367 million), and further shrinking to USD 33.8 million (approximately CNY 243 million) in 2025, resulting in a sharp year-over-year decrease of 34% in 2025.
In the first three quarters of 2026, X-FAB's combined wide-bandgap semiconductor business revenue reached USD 41.9 million (approximately CNY 302 million), already exceeding the full-year total for 2025. Based on average quarterly revenue projections, the company's silicon carbide business is expected to reach approximately USD 55 million this year, potentially recovering to 2022 levels.
X-FAB executives described the gallium nitride business as "gaining sustained momentum," currently in the early stages of customer acquisition. However, looking at the development process, X-FAB's gallium nitride development activities are also accelerating. Over the past year, the number of X-FAB's gallium nitride customers doubled from 6 to 12.