APS has utilized the CIDM operating model in the silicon carbide market to achieve more flexible cooperation with suppliers and customers. So far, APS is one of the few domestic suppliers of silicon carbide devices that can ship SiC Mos products in large quantities. As of 2023, APS has shipped a total of 24 million 1200V silicon carbide device products. Its products and services have fully blossomed in the new energy vehicle, consumer, and industrial markets, receiving continuous praise from customers.

In 2024, what are the directions for APS product and business layout? How will technology iteration and customized services be carried out? We interviewed Mr. Chau Wing Chon, founder and CEO of APS, to discuss with us how APS can take another step forward in 2024.

Question 1: Can you share any good news about the silicon carbide products and market progress of APS in 2023?

A: In 2023, we have achieved a series of important achievements in the development of silicon carbide products and the market.

Firstly, we have successfully launched a series of third-generation SiC MOSFET products which have undergone further technological and process improvements. With better parameter consistency, lower switching losses, and excellent conductivity characteristics, the products meet the needs of high reliability and high-performance applications. We have achieved product coverage in our advantageous areas such as the charging pile market, the photovoltaic energy storage market that we are focusing on this year, and the key breakthroughs in vehicle OBC/DCDC/main drive. It can be said that at this critical time point in 2023, our company has gathered strength to seize some market opportunities.

Secondly, in terms of breakthroughs in the automotive grade silicon carbide product series, our company includes products such as 1200V 35/70/160m Ω and 650V 30/45/60m Ω, which passed the AEC-Q101 reliability verification and HV-H3TRB testing in 2023. It is worth noting that in the field of new energy OBC applications, we have passed the customer's on-board verification and achieved large-scale supply.

Question 2: This year, APS achieved new breakthroughs in the optical storage market. What are the advantages of the company's products in the optical storage market and the next steps in product roadmap planning?

A: After entering the 14th Five Year Plan, driven by the "dual carbon" policy, the new energy industry has ushered in a new cycle of rapid development, and the development momentum of China's photovoltaic storage market is good.

In fact, we have been deeply involved in the field of optical storage for many years. Currently, APS can provide high-quality silicon carbide application solutions for different scenarios in the optical storage market, such as household scenarios, commercial scenarios, and power plants. In 2023, through close cooperation with customers and focusing on their new product development needs for optical storage inverters, we successfully developed and launched a new SiC diode that is more suitable for the current needs of optical storage users. It passed customer validation and achieved large-scale production.

Meanwhile, in terms of SiC MOSFETs, we are also conducting customer sample delivery and verification work. Currently, we are working with our clients to develop silicon carbide modules to meet the needs of higher power and higher power density designs. Our strategy for laying out the optical storage market still revolves around customer needs, complementing the product layout on the client side, with the goal of providing customers with complete silicon carbide solutions.

Question 3: How is the current promotion of high current silicon carbide MOS products for automotive main drives? Does the domestically produced SiC chip have the ability to be loaded onto the vehicle as soon as possible?

A: In 2023, we launched 1200V 30/40/80m Ω SiC MOSFETs.

At present, we have made some progress in promoting high current silicon carbide MOSFET products for automotive main drive.

In terms of verification, we have successfully provided automotive grade silicon carbide MOSFET products to multiple customers for verification, and have initially reached cooperation with leading enterprises in the field of new energy vehicles. At the same time, we are actively expanding our cooperation with other clients in this field, striving to gain more market share.

In fact, according to the business rhythm of APS, we have not pursued getting on board too quickly because we believe that SiC power devices still face some challenges and bottlenecks that domestic silicon carbide enterprises need to further overcome.

Firstly, it is necessary to ensure yield and design process, which is the foundation. Reliability is an important indicator for measuring the expected lifespan of devices. The most critical threshold voltage (Vth) drift and gate oxygen reliability in silicon carbide devices are the core parameters for evaluating the technical reliability level of various silicon carbide MOSFET products. Domestic silicon carbide products still need to calculate how long it takes for the device to continuously meet regulatory requirements based on reliability results.

Secondly, it is necessary to pass the basic guarantee of AEC-Q101 to ensure that the product meets the strict requirements of the automotive industry. We will continue to strive to overcome these challenges, improve the reliability and performance of our products, and make efforts to achieve the on-board capability of domestically produced SiC chips.

Question 4: Faced with the current "rolling" market environment, various enterprises have different opinions on whether to increase investment in "attacking" the new application market or "defending" the existing market. What is APS approach?

A: We believe that in the current market environment, simply maintaining the original market is definitely not enough.

The Chinese silicon carbide market is undergoing changes and competition is becoming increasingly fierce. Enterprises are continuously reducing costs to compete for market share. As a relatively small enterprise, APS realizes that we cannot rely solely on the existing market to support development, but need to actively explore new application markets.

The 2024 goal of APS is to increase investment in new application markets while maintaining its existing market share and stable growth. Especially in the fields of optical storage, new energy vehicles, and industrial automation, with our customers as our central focus, we will closely monitor market trends and customer needs, and strengthen technological research and innovation. By providing customized silicon carbide solutions, we will meet the needs of different industries and expand market share.

In the face of the current market competition, we also believe that the industry cannot develop without competition. Of course, we also firmly believe that in the current market environment, we have our own core competitiveness. Since 2015, APS has been developing silicon carbide products and has accumulated years of experience in this industry and has a stable customer base. In the past two years, the market has thrived, and our business model has also been recognized and supported by many downstream users. In the previous industry cycle, our product supply has always been completed with quality and quantity guaranteed, making us a reliable partner for downstream customers.

In summary, our approach is to achieve sustainable development by actively exploring new application markets while maintaining competitive advantages in the silicon carbide market and our existing market share and stable growth.

Question 5: How can companies adopting CIDM strengthen their supply chain layout and build high competitive barriers?

A: For companies adopting the CIDM model, maintaining the relationship between upstream and downstream supply chains is crucial.

In terms of epitaxy and substrate, we choose to establish stable and close cooperative relationships with domestic and foreign substrate raw material suppliers, ensuring that the supply chain can be operated in a stable and efficient manner.

In terms of chip manufacturing, we cooperate with wafer foundry Jita Semiconductor, which was the earliest domestic foundry to mass produce 6-inch silicon carbide devices. Through their manufacturing capabilities and resources, we achieve product production and high-quality delivery.

In addition, APS focuses on quality management and reliability assurance. We strictly adhere to the quality management system of international standards and have passed ISO 9001 certification and IATF16949 audit. By establishing a reliable product supply chain and strict quality control processes, we can ensure product consistency and reliability, providing stable product quality to customers.

Question 6: With the market driving the white heat of SiC applications and SiC devices entering global competition, what is APS view on the domestic industry chain competition and cooperation trends?

A: In recent years, the SiC device industry has indeed ushered in an era of global competition, and a group of silicon carbide related enterprises have emerged in China, actively planning the layout of the entire silicon carbide industry chain. However, in the context of fierce market competition, small-scale manufacturers face cost disadvantages and the problem of being unable to meet market demand. Therefore, some small-scale manufacturers may be merged and integrated by large-scale manufacturers. In this context, we believe that an open and cooperative attitude should be adopted.

First, we need to strengthen the competitiveness of the domestic industrial chain by improving the quality of our products and technological level in order to meet market demand. This can be achieved through continuous innovation, technological research and development, and talent cultivation. By enhancing our competitiveness, we can gain a larger market share.

At the same time, we should also cooperate with the international market. The SiC device market is global, and various countries are actively promoting its development. We can learn from foreign experiences and technologies and establish partnerships with international enterprises, learning from each other and developing together. By conducting international cooperation, we can broaden market channels, improving the product competitiveness and influence.

Question 7: If you use three keywords describe the past year of 2023, what are the keywords for APS ?

A: The key words for 2023 are steady improvement, developing cooperation, and adhering to innovation.

In 2023, we achieved steady improvement, especially in terms of revenue generated by SiC MOSFETs. Compared to 2022, the revenue generated by SiC MOSFET has increased from 17% to 50%, indicating market recognition of our products, driving the continuous growth of our business and the improvement of our market position.

In addition, we have also expanded our cooperation in 2023 and successfully launched the new generation of SiC MOSFETs and automotive grade SiC MOSFETs. We have also established close partnerships with leading enterprises in the fields of new energy, optical storage, and charging piles. By jointly promoting the application of silicon carbide technology in various fields, we have solved technical difficulties, shared resources and experience, and accelerated product development and promotion, achieving mutual benefit.

Finally, adhering to innovation is one of the key words we have achieved in 2023. We continue to carry out technological innovation and product research and development in the field of silicon carbide, and have accumulated rich technology and experience. We have obtained over 40 independently developed patents, and more than 50 patents are currently being applied for. In the future, we will continue to innovate and iterate products to create more high-quality products for customers and achieve continuous value creation.

Question 8: How will you take another step in 2024?

A: In 2024, APS will continue to strive to take a new step forward.

Our main goal is to expand the application market of SiC MOSFETs and initiate projects for SiC MOSFETs in the automotive field. Firstly, we will strive to further expand the application market of SiC MOSFETs. In 2023, we have achieved significant growth in SiC MOSFETs, but there is still great potential for development. We will continue to work closely with partners from various industries to promote the application of SiC MOSFETs in new energy, optical storage, charging piles and other fields.

Secondly, we will launch the SiC MOSFET project in the automotive field. With the rapid development of new energy vehicles, SiC MOSFETs have enormous potential in automotive electronic systems. We plan to collaborate with car manufacturers to apply SiC MOSFETs to key components such as power electronics and charging systems in electric vehicles. By providing efficient and reliable solutions, we will contribute to the further development of the electric vehicle industry, achieving the goals of energy transformation and sustainable development. In addition, in terms of diodes, we will also focus on the application markets of high power, high voltage, and high current. By continuously improving product performance and quality, we will meet the needs of different industries for high-performance diodes, such as industrial automation, power transmission, photovoltaics, and other fields. We will work closely with our customers to provide reliable products and technical support, and provide the best solutions for their applications.

In summary, 2024 is a crucial year for APS. By expanding the application market of SiC MOSFETs, launching SiC MOSFET vehicle projects, and focusing on the development of diodes, we will further consolidate and expand our leading position in the silicon carbide market, achieving sustained growth and comprehensive business development.