The power semiconductor industry has taken the lead in sounding the clarion call for a "booming start" at the beginning of 2026. On one hand, Luxiao Technology has achieved a key technological breakthrough in 8-inch SiC substrates, and the team led by Academician Hao Yue of Xidian University has broken the international record for GaN power devices, with domestic technologies accelerating to break the overseas monopoly; on the other hand, the semiconductor materials sector has strengthened against the market, leading stocks have hit the daily upward limit, and capital continues to increase layout in the third-generation power semiconductor track. The industry is ushering in an irreversible wave of high-end upgrading, becoming the most certain growth main line in the semiconductor field in 2026.
Domestic SiC/GaN Achieve Breakthroughs on Multiple Fronts
As core components of strategic emerging industries such as new energy vehicles, photovoltaic energy storage and 5G communications, the technological iteration speed of power semiconductors directly determines the upgrading pace and core competitiveness of downstream industries. In January 2026, domestic third-generation power semiconductors (SiC/GaN) have witnessed intensive technological breakthroughs, completely breaking the nearly 20-year monopoly pattern of overseas giants such as Infineon and Wolfspeed, and the process of local replacement has been greatly accelerated.
In the SiC field, Luxiao Technology has become one of the biggest highlights at the start of the year. Hefei Luxiao, its wholly-owned subsidiary, has fully mastered the core technology of 8-inch conductive SiC substrates and proficiently grasped the whole process of crystal growth. Key performance parameters such as micropipe density and surface roughness have reached the advanced industry level, superior to the current global mainstream standards. A large-scale manufacturing system has been built, which can directly meet the core needs of high-end application scenarios such as power control of new energy vehicles and photovoltaic inverters. Notably, Luxiao Technology simultaneously announced an adjustment to the investment scale of its silicon carbide project, cutting the planned raised capital investment of 1.94 billion yuan to 990 million yuan, with the remaining 950 million yuan to supplement working capital. The core logic behind this is that the market competition for 6-inch SiC substrates is becoming increasingly fierce and downstream demand has slowed down periodically. The company has chosen to take the initiative to shrink low-end production capacity, focus on the layout of 8-inch high-end products, reduce operational risks by optimizing the production capacity structure, and seize the right to speak in the high-end track.
Historic breakthroughs have also been made in the GaN field, with the team led by Academician Hao Yue of Xidian University achieving major technological innovation. The team pioneered the core technology of "ion implantation-induced nucleation", fundamentally changing the growth mode of the aluminum nitride layer and successfully transforming the originally rough "polycrystalline island-like" structure into an atomically flat "single crystal thin film". This has reduced the device interface thermal resistance to one-third of that of traditional structures, solving the worldwide problem of the "thermal bottleneck" of GaN power devices that has plagued the global industry. GaN microwave power devices prepared based on this technology have achieved output power densities of 42 W/mm and 20 W/mm in the X-band and Ka-band respectively, once again raising the performance record of international similar devices. Relevant results have been published in top international journals such as Nature Communications and Science Advances, providing core technical support for high-end fields such as 5G/6G communications, satellite Internet and aerospace, and driving domestic GaN devices to rank among the international advanced ranks.
The multiple breakthroughs of domestic SiC/GaN have not only broken the technological monopoly and production capacity blockade of overseas giants, accelerated the process of local replacement of power semiconductors, and continuously narrowed the gap with the international advanced level, but also laid a solid foundation for subsequent large-scale mass production and market breakthroughs.
Sector Boom Spikes, Manufacturers Rush to Lay Out in the High-End Track
The continuous implementation of technological breakthroughs has driven capital pursuit and production capacity expansion to work together. Under the resonance of the dual positive factors, the power semiconductor industry has officially entered a high prosperity cycle, with an outstanding performance since the start of the year, becoming one of the core hot tracks in the capital market.
At the capital level, the sector shows distinct characteristics of "the sector strengthening and leading stocks outperforming". On January 16, against the background of the overall adjustment of the A-share market, semiconductor material concept stocks rose against the trend. Tianyue Advanced, the leading silicon carbide enterprise, hit a 20cm daily upward limit, Kangqiang Electronics recorded a 10cm daily upward limit, and stocks such as Shanghai Hejing and Shenggong Co., Ltd. rose by more than 7%. A total of 12 related stocks hit a record high on the same day. According to statistics, as of January 23, the average increase of the semiconductor material sector since 2026 has reached 21.15%, significantly outperforming the market in the same period, with institutional funds clustering for layout. Among them, core targets such as Debang Technology and Haohua Technology are unanimously optimistic about by institutions, with predicted upside potential of more than 10%. However, from the latest market trends on January 23, the stock performance within the sector has diverged: Tianyue Advanced rose slightly by 0.29%, Kangqiang Electronics fell slightly by 0.43%, and the short-term popularity has declined, but the long-term growth logic of the industry remains unchanged, and capital's willingness for long-term layout in the third-generation power semiconductors is still strong.
In terms of production capacity expansion, domestic core manufacturers have increased their layout one after another, focusing on high-end products and core materials, accelerating the improvement of industrial chain layout and seizing market opportunities. In addition to Luxiao Technology focusing on the large-scale production of 8-inch SiC substrates and optimizing the production capacity structure, Haohua Technology has continued to exert efforts in the field of core materials for power semiconductors. The company's existing annual production capacity of nitrogen trifluoride reaches 5,000 tons, and the first-phase 3,000-ton unit of the new 6,000-ton/year nitrogen trifluoride project at the Yantan Base in Zigong, Sichuan has been successfully put into production. This product is mainly used in the etching and cleaning links of integrated circuits, which can fully meet the localization demand of high-end production capacity of power semiconductors. In addition, the Xinqiao Advanced Semiconductor Project with a total investment of 7 billion yuan was officially settled in Weihai Lingang on January 19, focusing on 6-inch silicon-based power semiconductor chips, covering core products such as MOSFET and IGBT. After the project is put into production, it will further fill the gap in domestic power chip production capacity and improve the regional industrial chain layout; the fourth phase project of Guangdong Core Semiconductor has been launched simultaneously with a total investment of 25.2 billion yuan, focusing on the layout of mixed-signal special processes, accurately adapting to the demand for power devices, promoting the coordinated development of the upstream and downstream of the industrial chain, and enhancing the overall competitiveness of the industry.
In the short term, technological breakthroughs and capital popularity have brought significant industry dividends, but in the long run, domestic manufacturers still face many challenges. At present, domestic power semiconductors still have shortcomings in the stability of large-scale mass production, the verification cycle of downstream customers, and the shortage of high-end R&D talents. The industry still needs to continuously increase R&D investment, optimize production capacity layout, and break through core bottlenecks.
Dual-Line Game Intensifies
Currently, the global power semiconductor industry pattern shows a distinct trend of overseas giants monopolizing the high-end market and domestic manufacturers breaking through the mid-to-low end. However, with the continuous implementation of domestic technological breakthroughs and accelerated production capacity expansion, this solidified pattern is gradually being broken, the dual-line game between overseas giants and domestic manufacturers is becoming increasingly fierce, and the industry differentiation trend is further intensified.
The high-end track is still the core position of overseas giants. Relying on long-term technological accumulation, improved industrial chain layout and large-scale production capacity advantages, overseas leading enterprises such as Infineon, ON Semiconductor and Wolfspeed occupy more than 70% of the global SiC device market share, with significant competitive advantages. Among them, Infineon's SiC wafer fab in Kulim, Malaysia has been officially put into production, targeting to occupy 30% of the global SiC market share by 2030; ON Semiconductor has realized the full industrial chain layout from substrate to packaging through the acquisition of GTAT, plans to put an 8-inch SiC wafer fab into production in 2025 with a planned annual production capacity of 600,000 wafers, and is expected to raise its market share to more than 20% in the next 5-10 years.
The local replacement of the mature track (IGBT/MOSFET) is coming to an end, and domestic leaders have gradually achieved large-scale profitability. Relying on the dividends of the explosive growth of downstream demand such as new energy vehicles and photovoltaic energy storage, domestic core manufacturers such as CRRC Times Electric and Star Semiconductor have continuously increased their product market share and optimized their product structure. At present, the penetration rate of domestic IGBT in the new energy vehicle field has been gradually improved, and the product quality of some manufacturers has reached the level of international similar products. At the same time, they are accelerating the upgrade to high-end automotive-grade and industrial-grade products, gradually replacing imported products and realizing the transformation of domestic leadership.
The localization process of the upstream material track is also accelerating simultaneously, becoming an important support for local replacement. As a core link in the upstream of the power semiconductor industrial chain, the localization rate of semiconductor-grade silicon materials has exceeded 50%, and the localization rate of key materials such as polishing slurry has broken through 30%. Enterprises such as Debang Technology and Haohua Technology focus on supporting materials for power semiconductors, continuously break through core technologies, and gradually realize import substitution. Benefiting from the dividends of the capacity expansion of domestic downstream devices, corporate performance has maintained a growth trend. On the whole, the domestic power semiconductor industrial chain is gradually improving, forming a good trend of coordinated development from upstream materials, midstream devices to downstream applications, and the overall process of local replacement is continuously accelerating.
(Reprinted from https://news.eccn.com/）