The Breakthrough of Domestic Automotive Chips: From 5% to 15% Market Share

The Chinese automotive chip industry is staging a remarkable comeback. In just two years, the localization rate has surged from 5% to 15%, finally breaking through in a field that was once constrained by external pressures.

Explosion of Electric Vehicles: Surge in Chip Demand

In 2024, sales of new energy vehicles in China are expected to exceed 12.86 million units, more than nine times that of 2020. This electrification revolution has led to an exponential increase in chip demand:

• Traditional fuel vehicles: 600-700 chips

• Electric vehicles: approximately 1600 chips

• Smart vehicles: over 3000 chips

With companies like BYD, Geely, and Xpeng continuously increasing their sales, the chip market is thriving. It is expected that by 2026, the market size of automotive chips in China will reach 140 billion yuan.

Golden Opportunities for Chip Companies

Faced with a massive market opportunity, domestic companies such as Weir Shares and Allwinner Technology are rapidly emerging. Among them, Allwinner Technology has shown particularly impressive performance:

• Net profit skyrocketed by 626% in 2024

• Net profit expected to increase by over 70% in the first quarter of 2025

• Revenue from automotive electronics continues to rise

Smart Cockpits: The Main Battlefield for Domestic Chips

Allwinner Technology has achieved key breakthroughs in the smart cockpit sector:

• AR-HUD and smart laser headlights are now in mass production

• The T736 cockpit chip has been adopted by leading automotive manufacturers

• Clients include mainstream brands such as Changan and Geely

As the penetration rate of smart cockpits approaches 90%, this market is becoming a “must-win” area for domestic chips.

AI Chips: Another Growth Engine

In the edge AI sector, Allwinner Technology is also thriving:

• 12nm process SoC chips are in mass production

• RISC-V architecture products are widely used

• Robot chip MR536 is rapidly scaling up production

Orders from tech giants like Xiaomi and Alibaba provide strong support for its performance growth.

Conclusion

From following to breaking through, domestic automotive chips are rewriting the market landscape. Although challenges remain, the 15% localization rate has already proven that “China chips” are accelerating their entry into the market.

(Investment carries risks; this article does not constitute any advice)

Related Reading: New US Tariff Policy Benefits the Electronics IndustryThe latest tariff exemptions cover semiconductors, computers, and other products, expected to reduce cost pressures for related companies and benefit the development of the industry chain.

Appendix: Impact of US Tariff Exemptions on the Electronics Industry

1. Scope of Exemption: Covers semiconductors, computers, communication devices, and consumer electronics, aimed at reducing costs for US companies.

2. Industry Impact: Industries such as mobile phones, servers, and semiconductors benefit, alleviating pressure on supply chains like Apple and NVIDIA.

3. Key Categories:

• Computers (8471), printers (8473.30);

• Semi-conductor equipment (8486);

• Smartphones (8517.13.00), memory (8523.51.00);

• Integrated circuits (8542), etc. This move reflects the US’s reliance on the Chinese supply chain, and the exemption list may continue to expand.

• (Note: The above analysis is for reference only in the context of publicly listed companies and does not constitute investment advice.)