China Semiconductors: Power Semi: Tight Supply, Better Pricing, Stronger Margins

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China Semiconductors: Power Semi: Tight Supply, Better Pricing, Stronger Margins

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China Semiconductors

Power Semi: Tight Supply, Better Pricing,

Stronger Margins

Rating Change

Price hikes as the inflection point for power semi upcycle 30 June 2026

We see China’s power semiconductor cycle entering a more constructive phase given 1) Equity

brighter growth outlook led by AI related application, including AIDC / AI servers; and 2) China

gross margin expansion opportunities driven by price hike due to supply tightness (esp. Semiconductors

for low-/mid-voltage power semis like MOSFET) in the supply chain. We expect further Daley Li, CFA >>

potential price hikes of power semi devices in 2H26E to act as an additional re-rating Research Analyst

catalyst for the sector, given limited incremental capacity for low-/mid-voltage power Merrill+852 3508Lynch5365(Hong Kong)

semi including MOSFETs and global suppliers appear to be reallocating capacity toward daley.li2@bofa.com

higher-value AI/AIDC applications, tightening supply for traditional industrial customers. Harry Zhuang >>

Research Analyst

Among power semis vendors in China, we expect companies with higher revenue Merrill Lynch (Hong Kong)

exposure to low-/mid-voltage power semi like MOSFETs/small signals could benefit +852 3508 7998

harry.zhuang@bofa.com

more from supply shortage (Exhibit 10).

Compute & data storage to lead the demand growth Exhibit 1: We revised up PO for NCE

China’s power discrete market size was US$13.2bn in 2025 and we expect it to grow at Power and Silan, and upgrade Silan to

a CAGR of 10% to US$17.7bn in 2028E. By application segment, compute & storage

Neutral

could be the fastest-growing segment (+30% CAGR) in 2025-28E, followed by industrial China power semis: PO and rating change