「Stock God」 Serenity: Bullish on XFAB, Believes Its Valuation Is Below Reset Cost, With SiC, GaN, and Silicon Photonics Multi-Growth Thesis

On June 1, so-called "Stock God" Serenity shared a post outlining his investment thesis for Belgium-based semiconductor foundry XFAB. He argues that surging demand for 800V power architectures, AI data centers, and power semiconductors will continue driving growth in the silicon carbide (SiC) and gallium nitride (GaN) supply chains. As the only high-capacity pure-play SiC foundry operating in the U.S., XFAB holds a critical position in the ongoing restructuring of Western semiconductor supply chains, per Serenity. Serenity noted XFAB has already scaled production of advanced 6-inch SiC processes and is currently expanding its 8-inch GaN capacity. The company also has potential to launch 8-inch SiC operations in the future, with support from the U.S. CHIPS Act. While XFAB’s SiC business revenue jumped 152% year-over-year, he added its growth upside hasn’t been fully priced in due to the broader automotive industry downturn. XFAB partners with power semiconductor firms Navitas (NVTS) and Power Integrations (POWI), positioning it as a key beneficiary of AI power and 800V architecture trends. The U.S. Department of Commerce has designated XFAB as the only high-capacity SiC foundry in the U.S., with roughly $50 million in government funding to date, Serenity pointed out. On the European side, XFAB secured around €128 million in grants under the EU’s Chip Act to build MEMS and AI-related capacity, plus an additional €47.6 million earmarked for silicon photonics supply chain development. These government certifications and subsidies highlight XFAB’s strategic importance to critical semiconductor supply chains, he said. On valuation, Serenity stated XFAB currently trades at a price-to-book (P/B) ratio of just ~1.28x. Calculating based on standard foundry replacement costs, he added the company’s implied transaction value may even be lower than its reset cost. For investors, that means they’re buying XFAB’s existing business at a discount while effectively gaining future growth options for its SiC, GaN, and silicon photonics segments for free. Overall, Serenity sees limited downside risk for XFAB, with catalysts including ongoing EU and U.S. supply chain reshuffles, continued chip subsidies, and silicon photonics commercialization. He estimates the stock has valuation re-rating potential of 2.5 to 4 times its current level.