StarPower management visit: SiC and MCU expand applications, and improved utilization may support gross margin

Overview

This report is based on Goldman Sachs' discussions with StarPower management during its China Technology Tour in Shanghai. After a decline in performance in 2025 and 1Q26, management remains constructive on long-term gross margin improvement, supported by shipment ramp-up that lifts capacity utilization, end-market expansion from automotive into energy storage and AI data centers, and product-mix upgrades across SiC MOSFETs, IGBTs, and silicon-based power semiconductors.

Core views

Goldman Sachs is positive on the company's product-line expansion and product-mix upgrade, believing these will help the company capture more end-market opportunities, especially in new applications such as AI data center power. However, because power semiconductor devices still face overall pricing pressure and valuation is considered relatively fair, the report maintains a Neutral rating on StarPower.

Analysis framework

The report mainly uses management discussions, decomposition of business drivers, and relative valuation. On the operating side, it focuses on revenue mix, end-market demand, R&D spending, cost and depreciation pressure, capacity utilization, and product upgrades. On valuation, it combines the target P/E multiple with 2026E EPS and also references the relationship between industry P/E and EPS growth.

Methodology notes

• Valuation methodsTarget P/E valuation

  A 31.0x target P/E multiplied by 2026E EPS yields the 12-month target price of Rmb121.2.

  The target P/E multiple is derived from the relationship between industry P/E and EPS yoy growth, and is used to assess StarPower's fair value over the next 12 months.

• Factor analysisGS Factor Profile

  The Goldman Sachs factor profile compares stocks with the market and peers across growth, financial return, valuation multiples, and an aggregate dimension.

  Growth is based on forward sales, EBITDA, and EPS growth; financial return is based on ROE, ROCE, and CROCI; valuation multiples are based on P/E, P/B, EV/EBITDA, and other metrics; the aggregate indicator combines growth, financial return, and valuation percentiles.

• M&A frameworkM&A Rank

  Goldman Sachs uses a rank from 1 to 3 to assess the probability that a company becomes an acquisition target.

  1 indicates high probability, 2 medium probability, and 3 low probability; companies ranked 1 or 2 may include an M&A component in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• StarPower / 603290.SS

  This report covers the company and the investment-rated name

  Strengths

  Product-mix upgrades, SiC MOSFET iteration, IGBT upgrade to Gen-8, investment in automotive MCU, and expansion into end markets such as energy storage and AI data center power.

  Weaknesses

  Performance declined in 2025 and 1Q26, automotive revenue still has a high share, and R&D spending together with raw material and depreciation costs under the fab-lite model are pressuring gross margin.

  Comparison

  The company sits within Goldman Sachs' technology coverage universe and is compared with other Chinese and Asian technology, semiconductor, and hardware companies; the rating is Neutral relative to the coverage universe.

  Risks

  IGBT market growth falling short of expectations, slower-than-expected new design wins and share gains, slower-than-expected new product development, and intensifying competition.

• SiC MOSFET and silicon-based power semiconductor product lines

  A key driver of the company's future product-mix upgrade and end-market diversification

  Strengths

  Potential to expand adoption in applications such as energy storage, AI data center power, and automotive, lifting shipment scale and capacity utilization.

  Weaknesses

  Still in an investment and iteration stage, with heavy R&D burden and power semiconductor pricing pressure not yet fully eased.

  Comparison

  Compared with traditional automotive power semiconductor applications, energy storage and AI data center power can help the company reduce reliance on the highly competitive automotive market.

  Risks

  Market adoption speed, new product development pace, and competitive intensity could all affect profitability recovery.

Key data

• RatingNeutralGoldman Sachs maintains a Neutral rating on StarPower.
• 12-month target priceRmb121.2Based on a 31.0x 2026E EPS target P/E.
• Automotive revenue mixabout 50%Automotive still accounts for about half of total company revenue and is an important source of current demand volatility.
• Target P/E multiple31.0xDerived from the relationship between industry P/E and EPS yoy growth.
• Historical target price rangeRmb88.96 to Rmb343.57The chart shows multiple historical target prices from 2023 to March 31, 2026; the target prices in the table have not been adjusted for company actions.
• Disclosure priceRmb131.75StarPower price shown in company-specific regulatory disclosures.

Impact & implications

The report suggests that StarPower will still be constrained in the near term by slower EV demand, R&D burden, cost and depreciation pressure, and industry pricing pressure. However, if the upgrades in SiC, MCU, and silicon-based power semiconductors proceed smoothly and achieve shipment scale in applications such as energy storage and AI data center power, capacity utilization and gross margin could gradually recover. From an investment perspective, the fundamentals have directional support, but the current valuation and industry pricing environment make the risk-reward profile more balanced.

Risks

• IGBT market growth stronger or weaker than expected.
• New design wins and market share gains faster or slower than expected.
• New product development progressing faster or slower than expected.
• Industry competition weaker or stronger than expected.
• China EV demand below expectations, especially after subsidies were reduced.
• Rising raw material and depreciation costs continue to suppress gross margin.
• Pricing pressure on power semiconductor devices persists.

What to watch

• StarPower's shipment ramp-up pace and improvement in capacity utilization.
• Progress in the adoption of SiC in energy storage and AI data center power.
• Whether the automotive revenue mix declines and whether end-market diversification truly takes hold.
• Progress in upgrading IGBTs to Gen-8, SiC MOSFETs to Gen-3, and automotive MCU R&D.
• Whether the downtrend in power semiconductor pricing continues to narrow.
• Whether gross margin recovers as utilization improves and the product mix upgrades.