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We are currently in the earnings report season, and the semiconductor industry is experiencing a recovery. Let’s explore a chip company with impressive performance—Allwinner Technology.
Allwinner Technology’s core business is smart chip design, with main products including smart application processorsSoC, power management chips, and wireless interconnection chips,which are widely used in consumer electronics, smart automotive, industrial and robotics,AIoT, and many other fields.
In 2024, Allwinner Technology achieved operating revenue of2.288 billion yuan, a year-on-year increase of36.76%, with a net profit attributable to the parent company of167 million yuan, a significant increase of626.15%, and a non-net profit growth of1538.72%.
So, why did Allwinner Technology experience such high growth in 2024?
The high growth of Allwinner Technology is mainly attributed to the recovery of downstream market demand, product line expansion, and the restoration of gross profit margins along with scale effects.
From a macro perspective,the semiconductor industry began to recover in the second half of 2023, primarily driven by automotive electronics,AI edge computing, consumer electronics, industrial IoT, and other fields.
For example:The trend of electrification and intelligence in new energy vehicles has driven a surge in demand for automotive-grade chips, especially for smart cockpits, autonomous driving, and vehicle networking-related chips;AI technology is penetrating into end devices, leading to an explosion in demand for edge computing power, promoting the application ofAI chips in smart homes, robotics, and other scenarios;the global demand for consumer electronics is recovering, with increased shipments of products such as robotic vacuum cleaners, smart projectors, and tablets;and industrial IoT and power equipment upgrades are driving the demand for high-performance chips.
Allwinner Technology has established a presence in all these fields. The company is gradually moving away from reliance on consumer electronics (such as tablets and OTT boxes) towards high-value-added sectors like automotive, industrial, andAIoT through its “Intelligent + Big Video” strategy.
The proportion of revenue from automotive chips has increased from 10% to 15%, and automotive-grade chips have passed the AEC-Q100 certification, deepening cooperation with automakers such as Tesla and BYD.
In the industrial and AIoT sectors, the company’s octa-core + AI dedicated computing power chips have made breakthroughs in commercial displays and edge computing, with the proportion of industrial revenue increasing to 15%; the shipment of robotics chips T527 has exceeded 500,000 units, and the 8K decoding chip V853 has been introduced into the supply chains of Hisense and TCL, with related revenue increasing by 200%.
Additionally, the revenue proportions of the company’s wireless communication and power management segments are 9.39% and 4.11%, respectively, becoming new profit growth points.
In terms of cost control, although the company’s gross profit margin has decreased year-on-year by 3.75 percentage points to 31.19%, through R&D expense deductions (totaling 59.57 million yuan) and investment income adjustments, the net profit margin has surged from 1.37% to 7.29%.
Overall, Allwinner Technology’s performance is quite good, but there are still some concerns.
In Q4 2024, there was a significant divergence in performance: revenue growth slowed to 9.14%, net profit fell by 63.8%, and non-net profit plummeted by 86.11%, indicating a weakening of growth momentum.
The reasons for this are twofold:
On one hand, fluctuations in terminal demand combined with a high base effect have led to a slowdown in revenue growth, while gross profit margins have declined quarter by quarter (from Q1 of 33.4% down to Q4 of 28.4%);
On the other hand, R&D expenses of 550 million yuan (accounting for 24%) remain high, but some areas (such as automotive-grade chips) have long certification cycles, resulting in limited short-term profit contributions.
So, can Allwinner Technology continue to grow in 2025?
Investment Trends believes that the company still has growth potential in automotive chips, consumer electronics, andAIoT, as well as in industrial and robotics.
Benefiting from the increased penetration of smart cockpits and autonomous driving, it is expected that by 2025, the global automotive chip market will exceed 80 billion USD.
By 2025, the company’s share of automotive chips will increase to25%, continuing to expand. The company’s automotive-grade chipsT7 and T113 have already been mass-produced, entering the smart cockpit market, and in the future, the company will improve its automotive product matrix, benefiting from the increased penetration of L1-L2 level assisted driving.
Additionally, the company’s visual chips also have opportunities. For example, the company’s V853 processor supports high-performanceNPU, meeting the visual needs of automotive applications, and is expected to further penetrate smart driving scenarios.
Next, let’s look at consumer electronics,AIoT.
In the areas of robotic vacuum cleaners and smart projectors, the company has partnered with leading clients such as Roborock and Yunji, enhancing product competitiveness through visual obstacle avoidance technology; the smart projector chip H713 series has optimized picture quality, continuously increasing market share.
In terms of edge AI applications, the company’s A523/A527 series chips are compatible with the Android ecosystem, supporting facial unlocking, beauty camera, and otherAI features, with demand for tablets and other terminals recovering.
Finally, let’s look at the industrial and robotics sectors.
In the area of industrial control chips, the company’s MR536/MR536 integrates3T NPU computing power, meeting the AI needs of industrial vision, and binding with leading clients to drive shipment growth.
Additionally, the company’s T536 industrial chip and MR536 robotics chip have achieved large-scale production, and in 2025, a new generation of motion control chips will be launched to strengthen the division of labor between the industrial “brain” and “cerebellum”.
Therefore, Investment Trends believes that if the demand for emerging fields such as smart driving and industrial robotics continues to be released, combined with the recovery of consumer electronics, the company is expected to maintain high growth. Great Wall Securities predicts that in 2025, the net profit attributable to the parent company will reach341 million yuan, doubling growth. In the short term, attention should be paid to the pressure of R&D investment on profits and changes in the industry competition landscape.
Disclaimer: The above content is for reference only and does not constitute investment advice.
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