Shares of EPIWORLD (HKEX: 02726) have surged more than 7%. At the time of writing, the stock is up 7.68% to HK$103.7, with a turnover of HK$16.471 million.

A research report highlights that the silicon carbide (SiC) epitaxial wafer industry is currently accelerating its transition from 6-inch to 8-inch wafers. The shift to larger sizes enhances product value and profit potential, and EPIWORLD has already secured a leading position in the mass production of 8-inch wafers. In the short term, while the industry faces oversupply and a shake-out of low-end, homogeneous capacity, supply for high-end, automotive-grade products remains tight.

On the capacity front, monthly production is projected to reach 76,000 wafers by the end of 2026, indicating the company is rapidly expanding its output. Furthermore, preparations for the supply chain of 12-inch products have commenced, which is expected to further widen the generational gap with competitors.

The analysis positions EPIWORLD as a global leader in the SiC epitaxial wafer sector, having successfully transitioned from a player in "domestic substitution" to a "global number one." The company leverages its deep technological moats and first-mover advantage in pioneering 8-inch and 12-inch large-size wafers to maintain deep, strategic partnerships with leading global power device customers.

Current demand for SiC devices is entering a new phase of rapid growth, positioning the company for potentially high-speed business expansion. Compared to the standardized and highly competitive SiC substrate segment, the epitaxial wafer (EPI) segment requires customization based on client needs, presenting a higher entry barrier. Additionally, as application voltage levels continue to rise, the value of epitaxial wafers for higher voltages increases. The segment's relatively stable competitive landscape contributes to growth and profitability that are superior to the industry average.