1. Chip Origin: A Semiconductor IP Platform with Two Decades of Technological Accumulation
1.1. Establishment History and Technological Evolution
- • Founding and Positioning (2001-2010) Chip Origin was established in 2001, originating from the Shanghai branch of Celestry, a U.S. company, and is one of the first integrated circuit design companies in China. Initially focused on the development of semiconductor standard cell libraries, founder Dai Weimin likened it to “burning bricks for the chip building.”
- • Key Acquisitions: – Merged with Hong Kong Zhonghua Technology in 2004 to expand system-level chip design capabilities; – Acquired the ZSP® digital signal processor division of LSI Logic in 2006, laying the foundation for IP technology.
- • Technological Platformization (2011-2020)
- • Acquired Vivante in 2016, gaining GPU IP and completing graphics processing capabilities.
- • Listed on the Sci-Tech Innovation Board in 2020, raising 790 million yuan for investment in smart vehicles, wearable devices, and R&D centers, establishing the “Chip Design Platform as a Service” (SiPaaS) model.
- • Ecological Expansion (2021-Present) Proposed the strategy of “IP chipification, chip platformization, and platform ecologicalization,” laying out Chiplet technology and collaborating with Google to promote the Open SeCura project, aiming for a successful 5nm SoC tape-out by 2025.
1.2. Financing History and Capital Operations
- • Pre-IPO Financing: Early financing details are undisclosed, but rapid expansion of the technology landscape was achieved through mergers and acquisitions.
- • Listing on the Sci-Tech Innovation Board (2020): Raised 790 million yuan, mainly for technology R&D and capacity building.
- • Refinancing and Strategic Investment:
- • In January 2025, promoted a 1.808 billion yuan private placement, targeting AIGC and smart travel Chiplet projects (market concerns arose due to long return cycles);
- • In July 2025, received strategic investments from 10 institutions including Huatai Asset Management and Guotai Fund, strengthening capital reserves;
- • In August 2025, raised 2.766 billion yuan through a shareholder inquiry transfer (transfer price 105.21 yuan/share), providing funds for the acquisition of Chiplet.
1.3. Chip Origin: The Game of Technological Investment and Profitability Turning Point
Chip Origin (688521.SH), as a leading enterprise in China’s semiconductor IP and chip customization services, has recently exhibited a typical trajectory of “high R&D investment – high growth – periodic losses” characteristic of hard technology enterprises. Financial data for the first half of 2025 shows that the company achieved operating revenue of 974 million yuan, a year-on-year increase of 4.49%, but the net profit attributable to the parent company expanded to a loss of -320 million yuan, a year-on-year decrease of 12.30%. This phenomenon of increasing revenue without increasing profit hides multiple structural factors:
- • R&D Investment Suppresses Short-term Profitability: In 2024, the R&D expense ratio reached 53.72%, with R&D personnel accounting for 89% (about 1800 people), and labor costs reaching 894 million yuan (a year-on-year increase of 25.65%). This intensity of investment ranks first among global semiconductor IP companies, even surpassing international giants like Synopsys, leading to short-term profitability pressure. However, high R&D investment has created a strong technological barrier—the company possesses six categories of processor IP (GPU/NPU/VPU/DSP/ISP/Display Processor) and over 1600 mixed-signal/RF IPs, with the completeness of IP ranking second globally.
- • Business Structure Affects Gross Margin: The company adopts a dual-driven model of “IP licensing + chip customization“, with the gross margin of IP licensing business reaching 87.42% in 2024, but only contributing 31.7% of revenue; while the lower-margin one-stop chip customization business (gross margin 18.69%) accounts for 68.3%. In the first half of 2025, the overall gross margin dropped to 43.32%, a year-on-year decrease of 1.08 percentage points, mainly affected by the increased proportion of low-margin business.
- • Cash Flow and Operational Efficiency Challenges: In the first half of 2025, the net cash flow from operating activities was -365 million yuan, remaining negative for multiple periods; inventory turnover days increased to 137.15 days (a year-on-year increase of 35.74%); accounts receivable accounted for 46.11% of revenue. These indicators reflect the company’s pressure on collection efficiency and inventory management during rapid expansion.
Despite the financial pressure, Chip Origin still demonstrates strong growth momentum and market recognition: By the end of the second quarter of 2025, the order backlog reached 3.025 billion yuan, a historical high, with a quarter-on-quarter increase of 23.17%, of which 90% was from one-stop chip customization business, and 81% is expected to convert to revenue within the next year. The company’s stock price increased more than sixfold from September 2024 to August 2025, with a market value exceeding 80 billion yuan, reflecting the capital market’s high expectations for its technological positioning and growth potential.
2. Chiplet: A Technological Pioneer in the RISC-V Track
2.1. Establishment History and Product Breakthroughs
- • Technological Foundation (2018-2020) Founded in September 2018 by Hu Zhenbo, positioned as China’s first commercial RISC-V processor IP company. Hu Zhenbo, as a leader in the RISC-V community, developed the first domestic open-source RISC-V core “Hummingbird E203” and published authoritative technical books.
- • Early Collaborations: In 2018, received angel investment from Chip Origin (holding 2.99%) and co-founded the China RISC-V Industry Alliance (CRVIC).
- • Commercialization Implementation (2021-2024)
- • Built four general-purpose CPU IP product lines (N/U/NX/UX) and three specialized IP lines (NS/NA/NI), covering AI, automotive, and other fields;
- • In 2023, became the world’s first to obtain ISO 26262 ASIL-D automotive certification based on RISC-V architecture, entering the automotive electronics market.
- • Ecological Expansion: As of 2025, served over 300 customers, including Xiaomi and China Electronics Technology Group, covering AIoT, 5G communication, and other scenarios.
2.2. Financing History and Valuation Leap
- • Multiple Rounds of Financing (2018-2023): Completed a total of six rounds of financing, with investors including industrial capital and financial funds:
Round Main Investors Strategic Significance Pre-A/A Round Xiaomi Yangtze River Fund, BlueRun Ventures, New Micro Capital Laid the foundation for commercialization B Round SMIC Xicheng (leading), Junlian Capital, CETC Fund Strengthened automotive and high-performance computing layout - • Valuation Leap:
- • In September 2023, post-B round valuation reached 2.565 billion yuan (PS about 42 times);
- • Expected valuation for acquisition in 2025 to rise to 3-4 billion yuan, with the premium mainly from the performance explosion in 2024 (revenue of 965 million yuan/net profit of 111 million yuan).
2.3. Chiplet: A New Star of Profitability in the RISC-V Track
- • Chiplet (Nuclei), as China’s earliest RISC-V CPU IP supplier, exhibits distinctly different financial characteristics from Chip Origin—high growth, light assets, strong profitability in a pure IP licensing model:
- • Explosive Growth Trajectory: In 2024, achieved revenue of 965 million yuan, a year-on-year increase of 23.61%; net profit attributable to the parent company was 111 million yuan, a year-on-year increase of 87.18%. This performance reflects a quantum leap compared to its 2023 revenue of 64.38 million yuan and net profit of 6.31 million yuan, indicating an acceleration in the commercialization process of RISC-V.
- • High Gross Margin Business Model: As a pure IP licensing enterprise, Chiplet does not bear the heavy asset investment and manufacturing risks of chip customization services, resulting in significantly higher gross margin levels than Chip Origin’s overall gross margin. Its core products include four general-purpose CPU IP product lines (N/U/NX/UX) and three specialized CPU IP product lines (NS/NA/NI), covering all scenario needs from edge computing to data centers.
- • Customer Ecosystem Advantage: As of 2024, the company has served over 300 domestic and international customers, covering key areas such as AI, automotive electronics, 5G communication, and cybersecurity. Particularly in the automotive-grade market, Chiplet’s NA900 and NA300 series became the world’s first RISC-V CPU IP to obtain ISO 26262 ASIL-D certification, establishing a first-mover advantage in the automotive electronics field.
Table: Comparison of Key Financial Indicators between Chip Origin and Chiplet (2024-2025H1)
| Indicator | Chip Origin (2024) | Chip Origin (2025H1) | Chiplet (2024) |
|---|---|---|---|
| Operating Revenue | 2.322 billion yuan (-0.69%) | 974 million yuan (+4.49%) | 965 million yuan (+23.61%) |
| Net Profit Attributable to Parent | -601 million yuan | -320 million yuan | 111 million yuan (+87.18%) |
| Gross Margin | 39.86% | 43.32% | Not disclosed (expected >80%) |
| R&D Expense Ratio | 53.72% | Not disclosed | Not disclosed |
| Order Backlog | 2.406 billion yuan | 3.025 billion yuan | Not disclosed |
3 Product and Business Structure Analysis
3.1 Chip Origin: Builder of a Platform-based Ecosystem
Chip Origin’s business structure revolves around two pillars: “semiconductor IP licensing” and “one-stop chip customization services“, forming a unique platform-based business model:
- • IP Licensing Business: Constitutes the company’s technological core and high gross margin source. In 2024, IP licensing revenue was 736 million yuan, accounting for 31.7%. Its core advantages include:
- • GPU IP: Cumulative shipments exceed 2 billion units, applied in display processing, image rendering, and other fields;
- • NPU IP: Used by 82 customers for 142 AI chips, cumulative shipments exceed 100 million units, supporting Transformer architecture optimization;
- • Automotive-grade IP: Certified by ISO 26262, with revenue growth of 37.32% in 2024;
- • Advanced Process Support: Covers 14nm/10nm/7nm/5nm FinFET and 28nm/22nm FD-SOI processes, with projects below 14nm accounting for 85% of design revenue.
- • One-stop Chip Customization Services: In 2024, revenue was 1.581 billion yuan, accounting for 68.1%, including:
- • Chip Design Services: In 2024, revenue was 725 million yuan, a year-on-year increase of 47.18%, with AI-related business accounting for 68%;
- • Mass Production Business: Affected by industry destocking, revenue in 2024 was 856 million yuan, a year-on-year decrease of 20.09%, but a year-on-year increase of 32% in Q4 2024 shows signs of recovery.
It is noteworthy that Chip Origin’s customer structure is undergoing a strategic transformation: In the first half of 2024, revenue contributions from system manufacturers, internet giants, cloud service providers, and automotive companies accounted for 37.2%, while the proportion of startup chip design companies decreased from over half in earlier years to less than 30%. This reflects the company’s focus on “high computing power, high process, and advanced packaging” projects, led by large system manufacturers/internet companies.
3.2 Chiplet: A Specialist in RISC-V CPU IP
As China’s first professional RISC-V processor IP and solution company, Chiplet has built a full-scenario covered CPU IP matrix:
- • General-purpose CPU IP Product Lines:
- • N/U Series: 32-bit architecture, supports SV32 MMU, aimed at edge computing and low-power IoT scenarios;
- • NX/UX Series: 64-bit architecture, supports SV39/SV48 MMU, aimed at high-performance scenarios such as data centers, network security, and storage.
- • Specialized CPU IP Product Lines:
- • NS Series: Targeting high-security scenarios such as payments;
- • NA Series: Certified by ISO 26262 ASIL-D, focusing on functional safety for automotive electronics;
- • NI Series: Aimed at high-performance computing scenarios such as AI.
Chiplet’s core technological advantage lies in its PPA (Power, Performance, Area) and quality metrics of processor IP: Utilizing robust industrial-grade Verilog coding, it holds multiple core patents that enhance data processing efficiency, such as single-port RAM data processing patents based on BHT and multi-port synchronous FIFO data reading patents. In 2023, the Chiplet NA series became the world’s first RISC-V CPU IP to obtain ISO 26262 ASIL-D certification, establishing a technological certification barrier in the automotive-grade market.
3.3 Synergistic Effects Post-Merger
After the acquisition, Chip Origin and Chiplet’s product lines will form a strong heterogeneous computing synergy:
- • Technical Complementarity: Chip Origin’s GPU/NPU combined with Chiplet’s RISC-V CPU forms a “general computing + dedicated acceleration” combination, providing a full-stack solution comparable to ARM’s “Cortex + Mali”. Chip Origin’s advanced process IP below 14nm complements Chiplet’s mature process CPUs above 28nm, covering the full process needs from automotive-grade MCUs to AI acceleration chips.
- • Automotive-grade Synergistic Efficiency: Chiplet’s NA series automotive CPUs seamlessly integrate with Chip Origin’s certified automotive-grade design processes, providing a complete automotive-grade SoC solution. In 2024, Chip Origin’s automotive electronics revenue increased by 37.32% year-on-year, and post-merger, it is expected to accelerate entry into the new energy vehicle supply chain.
- • AI Edge-side Synergy: Chiplet’s latest NACC Micro-NPU supports up to 4 TOPS computing power and TFLM inference frameworks, which, combined with Chip Origin’s NPU IP, will enhance competitiveness in edge-side AI (such as AR glasses, AI Pad). Chip Origin has customized low-power AR glasses chips for Google, supporting localized operation of Gemini small models.
Table: Upgrade of Chip Origin’s IP Product Matrix Post-Merger
| IP Type | Pre-Merger Capability | Post-Merger Additions | Application Scenarios |
|---|---|---|---|
| CPU IP | Dependent on external licensing (e.g., Arm) | Fully self-developed RISC-V CPU product line | Complete coverage from MCU to data center |
| GPU IP | Mature solutions (20 billion units shipped) | Optimized synergy with self-developed CPU | Graphics processing, display acceleration |
| NPU IP | Leading AI acceleration IP | Heterogeneous computing optimization with CPU | Cloud/edge AI inference |
| Dedicated Acceleration IP | VPU/DSP and over 1600 IPs | Enhancements for security/automotive-grade dedicated CPUs | Automotive electronics, payment security |
4 In-depth Analysis of Merger Strategy Logic
4.1 Technical Synergy: Completing the Key Puzzle of CPU
The core strategic demand of Chip Origin’s acquisition is to complete the key shortcoming of CPU IP, building a truly full-stack IP platform. Although Chip Origin has established advantages in GPU, NPU, and other dedicated processor IP fields, it has long relied on external licensing (e.g., Arm) in the core area of general computing, the CPU. By acquiring Chiplet, Chip Origin gains self-controllable RISC-V CPU IP matrix, achieving three major technological leaps:
- • Control of Self-Instruction Set Architecture: The open-source nature of RISC-V allows Chip Origin to break free from dependence on patented architectures like Arm, avoiding patent barriers and licensing fee dilemmas in the CPU market dominated by X86 and Arm. Especially in the current tense geopolitical situation, a self-instruction set architecture becomes key to ensuring supply chain security.
- • Integration of Heterogeneous Computing Platforms: The combination of Chip Origin’s NPU/IPU with Chiplet’s RISC-V CPU can form a complete solution similar to “ARM CPU + Mali GPU”. Chip Origin’s CEO Dai Weimin has publicly stated: “CPU IP is the last piece of the puzzle for Chip Origin’s layout,” and post-acquisition, it will be able to provide a complete set of IP solutions from CPU, GPU to NPU.
- • Automotive-grade Technical Synergy: Chiplet possesses the world’s first RISC-V architecture ISO 26262 ASIL-D certification, seamlessly integrating with Chip Origin’s certified automotive-grade design processes. After the merger, they can provide a complete solution from functional safety CPUs to automotive-grade SoC design, accelerating entry into the new energy vehicle supply chain.
4.2 Market Positioning: Competing for RISC-V Ecological Dominance
The strategic significance of the merger goes far beyond technical synergy; it is also a key competition for China’s RISC-V ecological dominance. Currently, the Chinese RISC-V industry has formed three major camps:
- • CRVA Alliance led by the Chinese Academy of Sciences: Led by Academician Ni Guangnan, focusing on the “Xiangshan” open-source high-performance RISC-V core, emphasizing self-control.
- • CRVIC Alliance led by Chip Origin: A commercial IP alliance with over 300 member units, focusing on patent pool construction, mass production support, and market promotion, aiming to “turn RISC-V into a sellable product”.
- • Wujian Alliance led by Alibaba Pingtouge: Built around Alibaba’s supply chain, with over 60 signed partners, focusing on full-chain mass production from “chips to boards to complete machines to applications”, representing the Alibaba ecosystem.
After Chip Origin acquires Chiplet, it will form a “dual duopoly” pattern with Alibaba Pingtouge, squeezing the survival space of small and medium IP manufacturers. In 2024, the global RISC-V IP market share shows: SiFive (15.3%), Andes (12%), Chiplet (10%+), StarFive (8%). The combination of Chip Origin and Chiplet will leap to the first place in China, directly challenging SiFive’s global leadership.
4.3 Dual Catalysis of Domestic Substitution and AIoT Wave
This acquisition occurs at a historical intersection of accelerated domestic substitution and the explosion of AIoT:
- • Window Period for Domestic Substitution: The U.S. continues to tighten semiconductor technology export controls to China, restricting “choke point” links such as EDA tools. Companies like Huawei are accelerating their shift to domestic IP suppliers, with Chip Origin becoming a rare 7nm design service provider in China, and in 2024, it became a supplier of Huawei’s Ascend NPU IP. After acquiring Chiplet, Chip Origin will possess full self-IP capabilities from CPU to AI accelerators, becoming a core carrier for domestic substitution.
- • Explosion of AIoT and Automotive Electronics: By 2030, the market size of AI SoCs based on RISC-V is expected to exceed $42 billion, with a compound annual growth rate of 49.2%. Chip Origin has laid out the Google AR glasses chip project in edge-side AI, and Chiplet’s low-power CPU will enhance its advantages in edge computing. In the automotive electronics field, the modular characteristics of RISC-V give it a natural advantage in smart cockpits and autonomous driving, with Chip Origin targeting a 25% revenue share from automotive chips by 2025.
- • Chiplet Technology Revolution: Chip Origin leads the first Chiplet product landing in China (Chromebook chip), based on UCIe/BoW interfaces and 2.5D CoWoS packaging. After acquiring Chiplet, its CPU IP can serve as a general computing unit in Chiplet systems, combined with Chip Origin’s NPU and other dedicated acceleration units, achieving more flexible heterogeneous integration. The company plans to deliver over 10 Chiplet projects by 2025, entering the AIGC/autonomous driving fields.
5 Transaction Structure and Valuation Arrangement
5.1 Transaction Plan Design
Chip Origin’s acquisition of Chiplet adopts a “share issuance + cash payment + supporting financing” composite transaction structure:
- • Step-by-step Acquisition Strategy: Chip Origin already holds 2.99% of Chiplet’s shares (after acquiring 6% in 2019 for 3 million yuan and being diluted). This transaction intends to acquire the remaining shares through share issuance and cash payment, achieving the goal of 100% control or controlling rights.
- • Transaction Counterparty Lock-in: Has signed a “Share Acquisition Intent Agreement” with Chiplet’s core shareholders, including founder Hu Zhenbo (legal representative), Chiplet Co-Creation (Shanghai) Management Consulting Center, and Chiplet Co-Creation (Shanghai) Management Consulting Center. Hu Zhenbo, as the technical leader of China’s RISC-V community, holds 42.1208% of Chiplet’s shares and is the actual controller.
- • Supporting Financing Arrangement: Simultaneously raising supporting funds, possibly for cash payment portions and subsequent business integration. In August 2025, Chip Origin completed a share inquiry transfer of 2.766 billion yuan (105.21 yuan/share, transferring 26,285,663 shares), reserving funds for the acquisition.
The company’s stock will be suspended from trading starting August 29, 2025, for no more than 10 trading days. The transaction still needs to meet multiple conditions: audit and evaluation results, formal agreement signing, board/shareholder meeting approval, regulatory agency review, etc.
5.2 Valuation Basis and Range Analysis
Chiplet’s valuation has not yet been finalized, but reasonable speculation can be made from multiple dimensions:
- • Reference from Financing History: In the latest round of financing in September 2023 (led by SMIC Xicheng, with Ten Capital and Longding Investment participating), Chiplet’s post-financing valuation reached 2.565 billion yuan (financing 65 million yuan, corresponding to 2.5341% equity). This round of financing had a PS of about 42 times (2023 revenue of 64.38 million yuan), with a dynamic PE as high as 407 times, reflecting the capital market’s high expectations for the RISC-V track.
- • Performance Growth Premium: In 2024, Chiplet achieved revenue of 965 million yuan and net profit of 111 million yuan, reflecting a quantum leap compared to 2023. If based on 2024 net profit, applying a PE of 25-30 times, the valuation range is approximately 2.775-3.33 billion yuan; if based on revenue, applying a PS of 4-5 times, the valuation range is approximately 3.86-4.825 billion yuan.
- • Industry Synergy Premium: For Chip Origin, the strategic value of Chiplet far exceeds its financial value. After acquiring Chiplet, Chip Origin can form a full-stack IP capability, which is expected to elevate Chip Origin’s overall valuation PS to over 20 times (comparable to Synopsys). Minsheng Securities’ research report points out that this acquisition is “an important step in the integration of domestic IP enterprises,” which may bring significant synergistic value premium.
Considering all factors, the market generally expects Chiplet’s acquisition valuation range to be between 3-4 billion yuan, a premium of 17%-56% compared to its 2023 financing valuation. This premium level is within a reasonable range for strategic acquisitions, especially considering Chiplet’s performance explosion in 2024 and the rapid growth of the RISC-V market.
5.3 Payment Method and Consideration Structure
Although transaction details have not been disclosed, possible payment structures can be inferred from industry practices and Chip Origin’s current situation:
- • Primarily Share Payments: Chip Origin’s current stock price is at a high level (153 yuan/share before suspension, up 191.82% within the year), utilizing share payments can alleviate cash flow pressure. The share payment ratio is expected to be around 60%-70%, issuing new shares to Chiplet’s shareholders to complete the main consideration payment.
- • Cash Payments as Supplement: The cash portion may be resolved through supporting financing. Chip Origin’s monetary funds increased by 204.32% due to the proceeds from the private placement in the first half of 2025, but operating cash flow remains negative (-365 million yuan), necessitating control of cash payment proportion at 30%-40%.
- • Performance Commitment Mechanism: Referring to semiconductor industry acquisition practices, the transaction may set 2-3 years of performance betting clauses, linking part of the consideration to Chiplet’s future performance to reduce acquisition risks.
Table: Chiplet Valuation Scenario Analysis (Unit: 100 million yuan)
| Valuation Method | Benchmark Data | Multiplier Range | Valuation Range | Main Basis |
|---|---|---|---|---|
| Price-to-Earnings Ratio Method (PE) | 2024 Net Profit 111 million | 25-30x | 277.5-333 | Average PE of Semiconductor IP Industry |
| Price-to-Sales Ratio Method (PS) | 2024 Revenue 965 million | 4-5x | 386-482.5 | High Growth RISC-V Company Premium |
| Comparable Transactions Method | 2023 Financing Valuation 2.565 billion | 1.2-1.5x | 307.8-384.8 | Performance Growth + Strategic Synergy Premium |
| Industry Benchmark Method | SiFive/Andes Valuation | N/A | 350-450 | Valuation of Global RISC-V Leading Enterprises |
6 Industry Competition Background and Pattern Evolution
6.1 Explosive Growth of the Global RISC-V Market
RISC-V, as the fifth-generation reduced instruction set architecture, is disrupting the traditional CPU market pattern with its open-source characteristics:
- • Exponential Growth in Shipments: In 2025, the global shipment of processor chips based on RISC-V architecture is expected to reach 80 billion units, and by 2030, the market size of RISC-V in AI SoCs will exceed $42 billion, with a compound annual growth rate of 49.2%. This growth is primarily driven by three scenarios: IoT devices, AI accelerators, and automotive electronics.
- • Market Share Restructuring: In 2024, the global RISC-V IP market share distribution is: SiFive (15.3%, USA), Andes (12%, Taiwan), Chiplet Technology (10%+, Mainland China), StarFive (8%, Mainland China). Chinese enterprises collectively occupy nearly 20% of the share, changing the traditional IP pattern dominated by Europe and the United States.
- • Automotive and AI as New Heights: Chiplet Technology obtained the world’s first RISC-V architecture ISO 26262 ASIL-D certification in 2023, marking RISC-V’s entry into the automotive electronics field with the highest functional safety requirements. At the same time, the modular characteristics of RISC-V show unique advantages in the field of AI customized chips, with Chiplet’s NI series designed specifically for high-performance computing.
6.2 The Three-legged Stand of China’s RISC-V Ecosystem
As the world’s largest semiconductor consumer market, China has formed three major RISC-V ecological camps:
- • CRVA Alliance (Chinese Academy of Sciences System):
- • Positioning: Nationally led research-oriented ecosystem
- • Core: “Xiangshan” open-source high-performance core (Nanhu/Kunming Lake)
- • Members: Institute of Computing Technology, Institute of Software, Alibaba, Baidu, SMIC, etc.
- • Goals: Solve basic issues such as instruction set expansion, toolchain, and talent cultivation
- • Industrialization Carrier: Beijing Open Source Chip Research Institute (Kai Xin Institute)
- • CRVIC Alliance (Chip Origin System):
- • Positioning: Commercial IP alliance
- • Core: Chip Origin IP platform + Chiplet CPU
- • Members: Over 300 IP/chip companies, complete machine manufacturers, investment institutions
- • Goals: Build a patent pool, support mass production, and promote the market
- • Business Model: IP licensing and chip customization services
- • Wujian Alliance (Alibaba Pingtouge System):
- • Positioning: Vertically integrated industrial closed loop
- • Core: Xuantie CPU + Wujian SoC platform
- • Members: SMIC, Huahong, TSMC Nanjing, Runhe Software, BYD Electronics, etc.
- • Goals: Achieve full-chain mass production from “chips to boards to complete machines to applications”
- • Application Scenarios: Alibaba Cloud, Cainiao Logistics, BYD Automotive, etc.
After Chip Origin acquires Chiplet, the CRVIC alliance will achieve a qualitative leap, upgrading from a single IP supplier to a platform enterprise with full-stack capabilities. The competition between Chip Origin and Alibaba Pingtouge will shift from misalignment to partial overlap, especially in the automotive SoC and data center CPU fields, where both sides will compete head-on around 2026.
6.3 Opportunities for Domestic Substitution under Geopolitical Tensions
In the context of intensified Sino-U.S. technological competition, RISC-V has become a key path for China to break through the “chip blockade“:
- • Avoiding Arm Ecosystem Risks: Although the Arm architecture dominates the mobile market, its intellectual property is governed by multiple countries, including the UK and Japan, posing supply risks. After the U.S. Chip Act in 2022 restricted support for advanced process technology to China, the open-source nature of RISC-V has become the preferred choice for self-control.
- • Building Local Technical Standards: The CRVA alliance of the Chinese Academy of Sciences promotes the “Chinese version” of instruction set expansion, such as the RV64GCB extended instruction set of the “Xiangshan” core. After acquiring Chiplet, Chip Origin can combine its RISC-V CPU with self-developed IP to form a de facto local standard.
- • Policy Dividend Support: China has included RISC-V in its national semiconductor strategy, with the second phase of the big fund increasing investment in IP enterprises. As a leading domestic IP player, Chip Origin is expected to accelerate ecological integration under policy support.
7 Risk and Challenge Analysis
7.1 Financial Integration Risks
Chip Origin and Chiplet have significant differences in financial performance and business models, facing multiple challenges during integration:
- • Increased Profit Pressure: In the first half of 2025, Chip Origin reported a net loss of 320 million yuan, while Chiplet achieved a net profit of 111 million yuan in 2024. After the merger, Chiplet’s profits will be consolidated, but it will be difficult to reverse Chip Origin’s overall losses in the short term. If the integration effect is not as expected, it may exacerbate Chip Origin’s financial pressure.
- • Cash Flow Pressure: In the first half of 2025, Chip Origin’s net cash flow from operating activities was -365 million yuan, while the acquisition transaction may involve cash consideration payments. Although the company raised 2.766 billion yuan through share transfers, excessive consumption of cash reserves may limit subsequent R&D investment and market expansion capabilities.
- • Goodwill Impairment Risks: If the transaction valuation is excessively high compared to Chiplet’s net assets, it will create significant goodwill. In the cyclical volatility environment of the semiconductor industry, if Chiplet’s future performance does not meet expectations, it may trigger goodwill impairment, eroding Chip Origin’s profits.
7.2 Business Integration Challenges
The differences in technical routes, corporate culture, and customer groups between the two companies create uncertainties for integration:
- • Technical Route Integration: Chip Origin mainly uses a combination of Arm architecture CPUs and self-developed acceleration IP, while Chiplet focuses on the RISC-V path. Coordinating customer needs for both architectures and avoiding internal resource competition is a significant challenge for management. Especially in customer projects, it is necessary to clarify when to recommend RISC-V solutions instead of Arm solutions.
- • Customer Resource Integration: Chip Origin’s customers are primarily system manufacturers and internet giants (accounting for 37.2%), while Chiplet’s customers are mostly small and medium-sized chip design companies (over 300 authorized customers). The significant differences in customer structures require careful design of the sales system integration to avoid customer loss.
- • Talent Retention Risks: Hu Zhenbo, the founder of Chiplet and a technical leader in China’s RISC-V community, is crucial for the success of the merger. The transaction design needs to establish reasonable founder incentive mechanisms, such as performance-based equity unlocking clauses, to ensure a stable transition of the core team.
7.3 Intensified Market Competition
Post-merger, Chip Origin will face a more complex competitive landscape:
- • Ecological Competition with Alibaba Pingtouge: The Alibaba Wujian Alliance has formed a closed-loop ecosystem from IP to complete machines, especially dominating the high-performance Xuantie CPU field. Although Chip Origin has completed its CPU shortcoming, it still lags behind Alibaba in software toolchains and operating system adaptations. The competition for customers in automotive electronics (such as BYD and other automotive companies) and data centers (internet companies) will intensify.
- • Patent Barriers from International Giants: Arm has recently intensified its patent litigation against RISC-V, initiating multiple infringement lawsuits in Europe and the United States in 2024. The Chip Origin-Chiplet combination needs to build a more comprehensive patent defense system, and the CRVIC alliance’s “no patent litigation” mechanism faces challenges.
- • Emerging Technology Substitution Risks: Potential competitors to RISC-V are emerging in the open-source instruction set field, such as OpenPower and MIPS Open. Although their current influence is limited, if international giants increase their open-source investments, it may divert attention from the RISC-V ecosystem.
Conclusion: Strategic Pivot for the Rise of China’s Semiconductor IP
The acquisition of Chiplet by Chip Origin is not just an ordinary industrial integration, but a crucial move for China to achieve self-control and global competitiveness in the RISC-V strategic track. Through this transaction, Chip Origin will upgrade from an “IP supermarket” to a “full-stack solution provider,” building a complete technological closed loop in core areas such as AI, automotive electronics, and data centers.
In the short term, the transaction faces challenges of financial integration pressure and intensified market competition, and Chip Origin needs to stabilize gross margins (40%+) and achieve positive operating cash flow in the second half of 2025 to prove the merger’s synergistic effects. In the long term, if Chip Origin can successfully integrate Chiplet’s CPU IP with its self-developed acceleration IP, building an ecosystem influence similar to ARM, it will open up a market value space of hundreds of billions, becoming a platform-level enterprise in China’s semiconductor IP field.
Amid the dual waves of AI and domestic substitution, the combination of Chip Origin and Chiplet represents a strategic transformation of China’s semiconductor industry from “technological following” to “ecological definition“. The success or failure of this merger not only concerns the fate of the two companies but will profoundly impact China’s discourse power in the global RISC-V ecosystem.
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