Nomura: National Silicon narrows third-quarter gross loss through sales volume; new prices expected to take effect from 2027

Where did third-quarter growth come from?

National Silicon’s third-quarter 2026 revenue was 1.319 billion yuan, up 39.8% year on year and 7.0% quarter on quarter, driven mainly by sales volume.
Revenue from 300 mm wafers rose more than 45% year on year, while revenue from products measuring 200 mm and below rose nearly 30%. Nomura sees this as a turnaround in the smaller-diameter business after weakness in the first half.
Improved capacity utilization and economies of scale lifted the overall third-quarter gross margin to negative 2.9%, from negative 17.5% a year earlier and negative 5.3% in the second quarter, though the company remained in gross loss.

Third-quarter net profit attributable to shareholders was 237 million yuan, driven mainly by a 689 million yuan fair-value gain from participation in ChangXin Technology’s strategic placement.
Excluding one-off items, recurring net loss attributable to shareholders was 374 million yuan, narrowing from 433 million yuan in the second quarter; the core operating loss widened from 301 million yuan in the second quarter to 307 million yuan.
Nomura forecasts full-year net losses attributable to shareholders of 1.075 billion yuan and 1 billion yuan for 2026 and 2027, respectively. A return to positive overall gross profit in 2027 would still be some way from a return to full-year net profit.

Management said most third-quarter deliveries were still under contracts signed in early 2026 or earlier, and average selling prices rose only slightly. Most of the more favorable prices renegotiated from the second quarter are expected to take effect in the first quarter of 2027.
As of the end of June 2026, the company’s installed capacity for 300 mm wafers was 1 million wafers per month, with guidance for 1.2 million per month by year-end. The Taiyuan site is converting built capacity into certified, qualified products, and monthly shipments are growing month by month.
Nomura expects the gross margin on 300 mm wafers to turn positive at some point in 2027 as prices and utilization improve; a slower price recovery or delays in customer certification or the capacity ramp-up would affect this process.

Because of the lag before new prices take effect, Nomura lowered its 2027 revenue forecast from 6.677 billion yuan to 6.535 billion yuan, a reduction of 2.1%. At the same time, it incorporated the third-quarter fair-value gain and narrowed its 2026 attributable net loss forecast from 1.656 billion yuan to 1.075 billion yuan.
Nomura maintained its buy rating and 36.20 yuan target price, valuing the company at 20 times enterprise value to forecast 2027 sales. The bank believes the company benefits from China’s localization of wafer production and has an opportunity to expand its logic-chip customer base as overseas suppliers’ long-term agreements expire.
The valuation multiple is about two standard deviations above the company’s historical average. Nomura says the average multiple during industry downturns is about 15 times and believes an upcycle can support 20 times.