On the evening of October 13, SigmaStar Technology released its performance forecast for the first three quarters of 2026. Net profit attributable to shareholders is expected to range from CNY 1.543 billion to CNY 1.613 billion, representing a year-on-year increase of 663% to 698%. With net profit projected to surge by nearly seven times at the upper end, the financial narrative for edge-side SoCs (System on Chip) is being rewritten.
A closer look reveals the trend more clearly. Net profit for the first half of the year reached CNY 863 million, a staggering 619% year-on-year increase. This implies that single-quarter net profit for the third quarter was approximately between CNY 680 million and CNY 750 million, continuing the upward trajectory from CNY 643 million in the second quarter.
This is not a sudden spike in a single quarter. Starting from the first quarter, the company has been consistently breaking its own historical records.
In Q1, revenue stood at CNY994 million, up 49% year-on-year; net profit hit CNY 220 million, surging 330%. In Q2, revenue jumped to CNY 1.664 billion, a 67% quarter-on-quarter increase; net profit rose to CNY 643 million, up 192% quarter-on-quarter. Each quarter showed stronger momentum than the last.
Gross margin is the most telling metric. It climbed from 46.05% in Q1 to over 55% in Q2, with the overall gross margin for the first half reaching 55.36%, an improvement of 22 percentage points year-on-year. In the semiconductor industry, this level of gross margin touches the ceiling typically seen among top-tier players.
SigmaStar focuses on visual AI SoCs—chips that essentially provide "eyes and brains" for robots, vehicles, and smart cameras. Among its three major business lines, edge-side AI SoCs generated CNY 1.764 billion in revenue in the first half, more than doubling year-on-year, serving as the absolute growth engine. Automotive electronics SoC revenue grew by 77%, while IoT (Internet of Things) SoCs maintained a steady 40% growth.
The company attributes the explosive performance to simultaneous increases in shipment volumes and average selling prices. However, there is another market interpretation: upstream memory chip price hikes allowed SigmaStar, as a downstream design firm, to pass on cost pressures through price adjustments. Notably, their price increases exceeded the cost rise, leading to an improved rather than deteriorated gross margin.
How much of this success stems from industry cycle tailwinds versus genuine product mix upgrades? The company addressed this in its interim report: excluding the pass-through effect of memory price increases, optimizing product and customer structures alone contributed to a gross margin increase of over 10 percentage points year-on-year. This suggests that organic growth is substantial.
The edge-side SoC sector is indeed booming. Demand for local computing power in robotics, automotive, and industrial vision scenarios is surging, and SigmaStar occupies a core supplier position in this space. By securing key brand customers, it has established high barriers to entry and supply chain resilience, which serve as a moat during periods of chip scarcity.
Nevertheless, concerns remain. Operating cash flow saw a net outflow of CNY 15.48 million in Q1, a dramatic 111% year-on-year drop, driven by aggressive inventory buildup. For a fabless chip design company, heavy asset stocking bets on sustained downstream demand. If enthusiasm for edge-side SoCs cools, these inventories could become a burden.
But at least for now, SigmaStar's reported results are sufficient to compel the market to reassess the true competitive strength of domestic SoCs.