1. Company Overview
The company was established in 2007 and is an outstanding designer of intelligent application processors SoC, high-performance analog devices, and wireless interconnection chips. The company specializes in the multimedia chip industry, accumulating core technology and relevant industry resources while establishing a complete chip R&D system. Subsequently, the company released several chip series, including the A series, V series, and T series, implementing a large video strategy and expanding the market significantly. In recent years, the company has continued to tackle technical challenges and advance its quality competitiveness strategy while consolidating its market position.
The company’s products are widely applicable in various fields, including industrial control, smart home appliances, smart hardware, tablets, automotive electronics, robotics, virtual reality, network set-top boxes, as well as power simulation devices, wireless communication modules, and smart IoT.
Company Business Matrix
Source: Company Annual Report
From 2017 to 2021, the company’s operating income grew from 1.201 billion yuan to 2.065 billion yuan. In 2022, due to the downturn in the consumer electronics market, revenue experienced a decline, but in 2023, the company achieved a strong rebound in revenue against the trend, continuing into Q1 2024. The net profit attributable to the parent company increased year by year from 2017 to 2021, reaching a peak of 494 million yuan in 2021. In 2023, the net profit attributable to the parent company further declined, mainly due to the downturn in downstream industries and high R&D investments. In Q1 2024, benefiting from the recovery in downstream demand and new product shipments, net profit reached 49 million yuan, with a year-on-year growth rate of 218.39%.
Company Total Revenue and Net Profit Situation (Billion Yuan, %)
Source: ifind
2. Industry Situation
The penetration rate of automotive electronics in various application fields in China still needs improvement.Currently, the automotive electronics market in China has widely adopted applications such as rear parking radar, central control screens, parking image systems, and cruise systems, with penetration rates exceeding 70%. However, the penetration rates of other automotive electronic devices and systems are below 40%, such as the fatigue reminder system at 23.4% and the side warning system at 13.5%. In the future, with the development of applications like assisted driving, the market for electronic components in these automotive components has significant growth potential.
Electronic Penetration Rates of Different Automotive Components
Source: Zhiyan Consulting
National policies continue to support and guide the automotive electronics industry, promoting its development and upgrading.In November 2023, the Ministry of Industry and Information Technology and other four ministries jointly issued a notice on the pilot work for the access and road testing of intelligent connected vehicles, officially launching the commercialization of intelligent connected vehicles. In December 2023, the Ministry of Industry and Information Technology released the “Guidelines for the Construction of National Automotive Chip Standard System,” scientifically planning and systematically deploying the standardization of automotive chips.
Recent Support or Guidance Policies for Automotive Electronics
Source: Various Government Websites
Automobiles are developing towards electrification, intelligence, and connectivity, continuously expanding the growth space for automotive chips.Pure electric vehicle power systems rely more on electric motors and electric systems, which correspondingly increases the demand for chips. According to data from the China Automotive Industry Association, traditional fuel vehicles require 600-700 chips, while electric vehicles require 1600 chips per vehicle, and intelligent vehicles require about 3000 chips per vehicle. With the clear trend of automotive electrification, the penetration rate of automotive electrification continues to rise, which will continuously open up growth space for automotive chips.
With the development of vehicle intelligence, the level of autonomous driving is increasing, leading to an increase in the number of sensors, main control chips, storage chips, and power semiconductors.In 2022, the penetration rate of L2 autonomous driving functions in China exceeded 30%, and it is expected to reach 50% by 2025. After 2025, L3 vehicles will begin large-scale production, and the overall market size will exceed 200 billion yuan by 2025.
Comparison of Chip Applications between Traditional Fuel Vehicles and Pure Electric Vehicles
Source: Yanzhi Automotive
2.2 AIoT
The Internet of Things (IoT) is a “network of everything connected,” referring to a network formed by various information sensors, RFID technology, global positioning systems, infrared sensors, laser scanners, and other devices and technologies, enabling intelligent identification and management of objects and processes.
Complementary advantages, IoT and AI technologies will deeply integrate.The data collected by IoT is mainly structured data, aimed at empowering business with faster interconnectivity and data monitoring. With the addition of AI, the perception layer gains the ability to collect unstructured data, significantly enhancing image and audio-visual perception capabilities; the application layer is endowed with multimodal understanding capabilities, further achieving intelligent interconnectivity based on existing data connections and monitoring.
AIoT Technology Architecture Diagram
Source: EEO Research Institute
Diverse terminal applications, expanding demand for the AIoT market.AIoT drives the implementation of artificial intelligence in various industrial scenarios. Intelligence has become a development trend, affecting various industries and having a profound impact on transportation, healthcare, education, and more. Based on driving factors, downstream applications can be roughly divided into three categories: ① Policy-driven: including smart energy, smart parking, smart firefighting, smart cities, smart security, and smart disaster prevention; ② Industry-driven: smart real estate, intelligent manufacturing, smart logistics, smart retail, vehicle networking, smart communities, and smart parks; ③ Consumer-driven: including smart travel, smart healthcare, smart home, and smart wearables. According to data from McKinsey, the global AIoT market size is expected to reach $11.2 trillion by 2025, achieving a tenfold growth from 2017; at the same time, the AIoT industry’s output value will account for 10% of global GDP by 2025, up from 1.4% in 2017.
Six Major Application Scenarios with the Highest Demand for AIoT
Source: a&s Research
Benefiting from the AIoT wave, the demand for edge computing has significantly increased.Edge computing is the link between AI and the user end. It is an emerging computing model that shifts computing and storage resources from traditional central data centers to edge devices, gateways, routers, and other devices, providing users with nearby services.
Edge computing accelerates development, gradually becoming the core of AI computing.With the rapid evolution and iteration of AI large models, their tool-like properties are becoming increasingly prominent. How to implement large models in various practical application scenarios at a lower cost has become a key focus of current AI development. Edge computing deployed closest to each operational logic has advantages of low cost, high timeliness, and high security compared to cloud computing, serving as a bridge for AI implementation in numerous segmented scenarios.
With the accelerated penetration of AIoT and 5G intelligence, the demand for edge computing has exploded.By 2025, enterprises in the segmented market will exceed traditional IT service spending in public cloud computing. In 2022, enterprise IT spending due to cloud migration will exceed $1.3 trillion, growing to nearly $1.8 trillion by 2025.
China’s Intelligent Computing Scale and Forecast from 2020 to 2027
Source: IDC
3. Company Competitive Advantages
Focusing on intelligent cockpit SoC, mass production and market launch to boost growth. The SoC design technology platform drives the company’s iterative innovation.The company implements the “SoC+” and “intelligent large video” industry positioning, making “leading technological competitiveness” an important strategic task, continuously laying out and investing in technology to provide a solid foundation and driving force for product innovation and market promotion. On one hand, the company insists on continuous improvement in core technology directions such as ultra-high-definition video coding and decoding, high-precision signal processing, efficient SoC system architecture, and mixed-signal design; on the other hand, the company continuously enhances the construction and planning capabilities of its technology platform, forming technology platform planning and accumulation based on product needs, aiming to create complete, stable, and rapidly mass-producible product packages for customers.
Deeply cultivating the application landing in intelligent cockpit and intelligent assisted driving fields.Currently, the products cover intelligent in-vehicle infotainment systems, fully digital dashboards, streaming media AR-HUD, intelligent laser headlights, intelligent auxiliary warning systems, etc., and conduct targeted research based on industry and customer needs to promote product serialization layout. Keeping pace with the trend of automotive electrification, the company collaborates with partners in the charging equipment ecosystem. To meet the high-performance cockpit domain control needs, an octa-core cockpit chip has been launched and is in the product development stage. In the parking field, the company collaborates with leading APA (Automatic Parking Assistance) suppliers, and APA products equipped with Allwinner chips have been successfully launched. The company’s AR-HUD (Augmented Reality Head-Up Display) and APA intelligent products have been mass-produced and launched in the OEM market.
Introduction to the Company’s Automotive Electronics Products
Source: Company Website
Having deep experience in the SoC field for many years, the main business includes the R&D and design of ultra-large-scale mixed-signal SoCs, intelligent power management chips, wireless interconnection chips, and voice signal chips, covering downstream applications in AIoT smart hardware, intelligent automotive electronics, smart manufacturing, and intelligent decoding display, working closely with customers in the industry chain to continuously promote product category expansion and upgrades.
Launching the first RISC-V application processor, empowering AIoT.In August 2020, the company reached a strategic cooperation framework with Pingtouge based on the RISC-V instruction set architecture, jointly creating a secure and reliable processor technology supply chain from instruction set to IP, chips, and products, promoting the dissemination of technology; in April 2021, the company released the world’s first application processor D1 equipped with the Pingtouge Xuantie C906 RISC-V, providing a new intelligent chip solution for the Internet of Everything, which has been mass-produced and applied in various fields such as smart cities, intelligent vehicles, smart home appliances, and smart commercial displays; the D1 chip-equipped Nezha development board has also become a well-known RISC-V development platform in the industry, entering many domestic and foreign universities and research institutions.
Company’s First RISC-V Application Processor Module and Applications
Source: Company Website
Increasing investment in supporting technologies, the new generation of chips has achieved full mass production.The company has increased its self-research investment in core technologies such as intelligent image engines, high-definition video encoding, and neural network processors, achieving smooth mass production of multi-eye heterogeneous AI vision chips V853, closely interacting with the industry ecosystem, making significant progress in intelligent face recognition door locks, scanning translation pens, multi-eye gun-ball cameras, and driving recorders. The new V85X series chips have introduced a new generation of AI ISP smart image processing engines.
Compiled by | Xing Yan
Reviewed by | Zhang Hongkui
Audited by | Li Hao
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