As AI large models ignite a computing power arms race, and automotive electronics and the Internet of Things generate a trillion-level demand for chips, China’s chip industry is shifting from “filling gaps” to “building strengths.” By the first half of 2025, the domestic self-sufficiency rate of high-end AI chips is expected to rise to 40%, with self-sufficiency rates exceeding 80% in niche areas such as power management and fingerprint recognition. As the “brain” of the industrial chain, chip design is the core engine of this replacement wave. From cloud computing chips to edge intelligent modules, a number of leading A-share companies have achieved technological breakthroughs, and the underlying industrial chain ecology reveals a clear path for industrial upgrading. The following will dissect the core players in the chip design field and the logic of the entire industrial chain layout.
Core Stocks in Chip Design and Representative Enterprises
- Cambricon (688256): Self-developed cloud/edge AI chip series, the Siyuan series, where the Siyuan 370 chip has been applied in inference scenarios for large models such as Baidu’s Wenxin Yiyan, and the Siyuan 290 has achieved large-scale deployment in edge computing devices like smart cameras. The company’s neural network processor (NPU) instruction set is internationally leading, and its market share in large model training cards is rapidly increasing, closely tied to the Chinese Academy of Sciences, and compatible with domestic AI frameworks (such as MindSpore), demonstrating strong technical capabilities in AI chip design.
- Hygon Information (688041): Its deep computing DCU system is comparable to NVIDIA’s A100, compatible with mainstream AI frameworks such as TensorFlow and PyTorch, and is expected to capture over 30% of the domestic server DCU market in 2024, making it the preferred alternative for large model training in China. The company’s net profit in the mid-2025 report is expected to grow by 40.78% year-on-year, deeply adapted to domestic large models, benefiting from the support of computing power localization policies, possessing independent instruction set authorization, and achieving deep cooperation in the wafer manufacturing segment with SMIC, with a high degree of de-Americanization, occupying an important position in the design of domestic high-end computing chips.
- Jingjia Micro (300474): As a leading domestic GPU manufacturer, the JM11 series has completed tape-out testing and is expected to achieve mass supply in 2025, having reached cooperation intentions with server manufacturers such as Lenovo and Inspur, covering devices such as servers and laptops, with graphics rendering performance reaching international mainstream levels (close to NVIDIA GTX 1650). Its Jinghong series intelligent computing modules have completed pilot applications in fields such as power dispatch and weather forecasting, gradually penetrating the industry market.
- GigaDevice (603986): A leading flash memory chip design company in mainland China, particularly in the NOR Flash market with a significant market share (over 15% globally in 2024), with products widely used in TWS earbuds, smart wearables, and IoT sensors. Driven by the dual forces of rising storage chip prices and domestic substitution, the company’s Qingyun Technology has launched customized storage based on advanced packaging to meet the high bandwidth needs of edge-side AI, while expanding its MCU business, with the GD32 series MCU chips applied in Xiaomi IoT devices and Huawei smart home appliances, and a year-on-year revenue growth of 25% in the MCU business in 2024, forming a “storage + control” dual-driven pattern.
- Chipone (688521): A leading domestic IP licensing company, ranking first in China’s semiconductor IP licensing market share in 2023 and eighth globally. Its NPU IP has been used in the 5nm process design of MediaTek’s Dimensity 9300 chip, with clients including Alibaba’s Pingtouge, Intel, and STMicroelectronics. The company is also one of the standard setters for Chiplet technology, having jointly developed a 2.5D packaging solution for AI chips with JCET, leading in the upstream IP licensing and advanced packaging collaboration in the chip design industry chain.
- Rockchip (603893): A leader in edge AI chips, its RK3588 chip covers automotive (BYD’s in-car central control system), security (Hikvision cameras), and robotics (UBTECH humanoid robots), with energy efficiency ratios leading internationally (performance of 1.2 TOPS per watt). The company’s net profit in the mid-2025 report is expected to increase by 185%-195%, breaking into BYD’s supply chain in the automotive electronics field, while also being a core partner in the OpenHarmony ecosystem, with revenue from OpenHarmony-related products expected to account for 30% in 2024, and launching the RK3688 chip to further expand into the industrial control field, improving the edge chip product matrix.
Chip Design Industrial Chain
- Upstream: Includes IP core suppliers and EDA tool manufacturers, which are the technical foundation of chip design. IP cores are important modules in chip design, and besides Chipone, ARM China’s Cortex-M series IP has over 60% market share in the domestic MCU field, and Huada Empyrean has also launched self-developed analog IP cores (covering operational amplifiers, ADCs, etc.); EDA tools are key software for chip design, with Huada Empyrean being the leading company in domestic EDA tool localization (over 18% market share in 2024), covering the entire process of analog circuit design. Additionally, Galen Electronics‘ circuit simulation tools support advanced processes of 7nm and below, and Guanli Micro‘s yield analysis system has been applied in the production lines of SMIC and Yangtze Memory Technologies, helping to improve chip manufacturing yields.
- Midstream: Refers to chip design companies, which are the core link of the industrial chain. Based on market demand and application scenarios, they utilize IP cores and EDA tools for chip architecture design, circuit design, simulation verification, etc. In addition to the aforementioned Cambricon, Hygon Information, Jingjia Micro, other leading companies in niche fields include: Zhuosheng Micro (300782) as a leader in RF chips, with its 5G RF switch chip capturing over 50% of the domestic Android smartphone market; Shengbang Technology (300661) whose power management chips have entered Apple’s supply chain, covering terminals such as mobile phones and laptops; Goodix Technology (603160) whose fingerprint recognition chips have over 30% global market share, widely used in flagship models of the Android camp.
- Downstream: Mainly chip manufacturing and packaging/testing companies, which undertake the industrialization of midstream design results. After chip design is completed, it needs to be handed over to wafer foundries for manufacturing, with SMIC being the only foundry in China capable of mass production of 14nm and below processes (with a 95% yield for 14nm in 2024), and Huahong Semiconductor‘s 28nm specialty processes (such as BCD processes) capturing over 20% market share in IoT chip manufacturing. Yangtze Memory’s 3D NAND flash chips have achieved mass production of 128 layers, breaking the monopoly of foreign companies; the manufactured chips are then packaged and tested by packaging/testing companies, with JCET being the third largest packaging/testing factory globally (with over 13% global market share in 2024), possessing advanced Chiplet packaging technology, and Tongfu Microelectronics‘ Chiplet packaging technology has been applied in AMD Ryzen processors, while Huatian Technology‘s SiP packaging products are widely used in wearable devices such as smartwatches and AR glasses, with the domestic packaging/testing market CR3 (JCET, Tongfu, Huatian) reaching 75% in 2024, indicating a high degree of industry concentration.
Opportunities and Layout Logic in the Wave of Replacement
From “usable” to “user-friendly,” the domestic chip design industry is ushering in a qualitative change. Upstream EDA tools have achieved breakthroughs in 7nm processes, midstream leading companies are experiencing explosive performance (such as Rockchip’s net profit expected to nearly double), and downstream packaging/testing companies are mastering core Chiplet technologies. With the entire industrial chain working in synergy, institutions predict that the industry’s net profit growth rate may approach 45% by 2025.
From an investment perspective, three main lines are worth noting:
1. AI computing power chips, with companies like Hygon Information and Cambricon firmly positioned in the domestic large model supply chain, benefiting from the wave of computing infrastructure;
2. Storage chips, with companies like GigaDevice capturing shares in niche markets, showing significant performance elasticity during the price increase cycle;
3. Analog chips, with leaders like Shengbang Technology and Zhuosheng Micro having entered the international supply chain. However, caution is needed regarding technological iterations (such as advanced process breakthroughs falling short of expectations) and geopolitical risks, prioritizing leading companies with high R&D investment and deep customer ties.
With the dual drive of policy support and market demand, the story of domestic substitution in the chip design industrial chain has just begun. Those companies that can continuously break through technical barriers will ultimately occupy a place in the global semiconductor landscape.
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