1. Mr. Dai, how many design-ins and design-wins does the company’s octa-core mobile chip have in OEM factories, and when will the mobile phones equipped with the company’s octa-core chip be launched?
The company’s first 4G octa-core chip has been designed into multiple projects in mobile and other non-mobile fields, and the progress is going smoothly. It is expected to start shipping in the third quarter of this year.
2. Dear Mr. Dai, hello!
(1) Could you please tell us which company visited last week? We noticed that from May 20 to May 23, the number of benchmark tests for the octa-core mobile processor was significantly higher than before. Does this mean that the company has made an important step in promoting the octa-core mobile chip? Is there more information about the ASR866x promotion that you can share with us?
The company’s first ASR866X has been introduced to multiple projects in mobile and other non-mobile fields, and the platform performance is continuously improving. The progress is going smoothly.
(2) What is the progress of the 6nm 4G mobile chip? Can we expect tape-out in June?
Yes.
(3) What is the positioning of the first 5G mobile chip?
The focus is on the mid-to-low-end smartphone market.
3. Dear Mr. Dai, does ASR have any cooperation or contracts with Alibaba or related companies for ASIC chip customization?
Due to confidentiality agreements with specific customization business clients, the company cannot disclose the cooperation situation at this time.
4. Dear Mr. Dai, it is known that ASR uses the most advanced design for the 6nm chip. Does the company have plans to adopt newer process technologies?
With the development of 5G smartphones and design service projects, the company will continue to optimize chip performance, power consumption, and cost based on the existing platform, expanding more application scenarios. Therefore, the company’s products will move towards more advanced processes.
5. Dear Mr. Dai, how is the company’s reserve of 5G-A baseband technology? Is there a plan to launch 5G-A chips?
The company has relevant baseband technology reserves in the 5G field and has begun preliminary research on 5G Advanced technology. There will be related chip launch plans in the future.
6. Can you share the company’s revenue goals for this year?
In 2025, the company will continue to maintain investment in technology research and development, product development, and customer expansion, striving for steady growth in sales revenue.
7. What is the expected shipment volume for the octa-core mobile chip this year? Is it in the millions or more?
Dear investors, hello! The company is currently making every effort to promote this product in the market, expanding market channels, and continuously optimizing performance to ensure that key indicators such as power consumption, computing speed, and image processing meet customer expectations. Regarding this year’s shipment scale, since the process from introduction, optimization to mass production of smartphone products is relatively long, the final outcome will depend on the mass production rhythm and market feedback of customer products. The company will do its utmost to promote the implementation of all links and strive for significant progress in business.
8. Can you evaluate Xiaomi’s self-developed SoC? Does it impact the company?
Based on the information from Xiaomi’s press conference, we assess that this baseband has no impact on the company’s current business layout.
9. Yesterday, Haiguang Information announced the acquisition of Zhongke Shuguang. Does the company have similar acquisition plans?
The company currently has no similar plans, and future decisions will depend on specific circumstances.
10. There are many rumors about the company customizing chips for major internet companies. Can you confirm or refute this? What is the growth expectation for chip customization business this year?
In terms of chip customization business, the company fully leverages its deep capabilities in chip design, rich practical experience in design service projects, strong hardware and software support, and comprehensive solutions to meet the customized needs of clients across various industries. As for the current specific cooperation situation, due to confidentiality agreements with clients, we cannot disclose it at this time. In terms of revenue recognition, the revenue from the company’s chip customization services is recognized in a lump sum after delivery and acceptance.
Due to the long cycle of large chip design business, the revenue from business undertaken from the second half of 2024 is likely to be reflected in financial reports in 2026 or even later. Additionally, from 2023 to the first half of 2024, the company’s R&D resources are mainly focused on self-developed smartphone chip series, with relatively limited investment in chip customization business, which also leads to the expectation that revenue from chip customization business in 2025 will not be very high.
11. When will the mobile phones equipped with the company’s octa-core chip be launched? Have there been any contacts with well-known mobile brands, and can you share the progress?
The company’s first 4G octa-core mobile chip is expected to start shipping to clients in the second half of this year. The second generation of 4G octa-core, if tape-out goes smoothly, is expected to gradually enter mass production in the first half of next year.
The company is steadily advancing market cooperation according to the gradient of “white-label customers → small and medium brands → leading industry brands”. It has established supply relationships with certain white-label suppliers, overseas operators, and local overseas brand merchants, and is actively engaging in technical docking and joint debugging with small and medium brands, while maintaining communication with some leading brands regarding product solutions. The overall cooperation process is progressing as planned.
12. Will the company’s upcoming mobile chips require advanced processes? Given the current tense international situation, the company’s tape-out is at TSMC, and there is a risk of being banned in the future. Is the company considering this risk, and what measures are in place to respond?
Hello! Although the company assesses that the risk of being banned is low for mobile chips, whether using advanced or mature processes, the company has already considered this risk and will take measures from product layout, technology path selection, supply chain management, and corporate operation management to respond.
13. The company has reported a net loss of over 100 million yuan in the consolidated financial statements for the past three years, while the current income tax expenses for the last three years (2022-2024) were 10.28 million, 29.46 million, and 46.78 million (see notes to the financial statements). What is the main reason for the large losses in the consolidated financial statements while the income tax burden is high? Is it due to the tax differences in equity incentive expenses or issues with the pricing of related party transactions within the company? Is there room for optimizing the pricing of transactions between the company and its subsidiary Hongkong SmartIC to reduce the overall income tax burden of the group?
Dear investors, hello! The income tax expenses listed in the company’s consolidated financial statements mainly come from the income tax expenses of profitable subsidiaries within the group. The company will continuously evaluate and optimize relevant business and operational arrangements within the overall framework of tax compliance to reasonably control all expenses, including income tax expenses.
14. In recent years, the company has participated in investments in several technology companies through direct equity investment or private equity funding, with a total investment of about 600 million yuan. Among these investments, Shending Technology (Nanjing) has resulted in an investment loss of 81.04 million yuan for the company’s 2024 performance. Meanwhile, the company’s main business is still in a state of consuming cash flow every year. The company’s net cash flow from operations for the last five years (2020-2024) was -557 million, -639 million, -354 million, -678 million, and -404 million. Of course, due to the over-subscription of the IPO, the company currently has a solid capital reserve. Will the company further expand its funding for seeking industrial investment opportunities in the future? Is the board considering setting a limit to control investment risks?
Dear investors, hello! The company always pays attention to long-term development opportunities in the high-tech industry. Based on the current macroeconomic environment, industry cycle situation, and its own capital allocation needs, there are currently no new external investment plans in the short term. In terms of funding, priority will be given to ensuring the R&D investment and operational funding needs of core businesses to ensure stable development of the main business.
Although the company remains cautious in the short term, it does not completely rule out the possibility of making long-term strategic investments. In terms of investment risk management, the company has established and will continue to improve various preventive measures, including but not limited to investment limits, due diligence, and post-investment tracking management. All investment matters are conducted in accordance with the internal governance systems such as the “Articles of Association”, “Investment Management System”, “Board Meeting Rules”, and “Shareholders’ Meeting Rules”.
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