Domestic substitution of autonomous driving chips, a new model for China's independent chip supply

Recently, Horizon Robotics, a unicorn in China's smart chip field, has once again announced financing information. According to relevant reports, Horizon Robotics plans to raise US$100 million to US$200 million. As for the IPO, Horizon Robotics is currently waiting for a more appropriate time, that is, when the market has a reasonable or even high valuation, it will seek an IPO in Hong Kong.

Horizon Robotics, an excellent representative of domestic alternative solutions

Currently, Horizon Robotics has launched three automotive-grade chips: Journey 2, Journey 3, and Journey 5. Among them, it is particularly worth mentioning that as a third-generation automotive-grade chip, the AI ​​computing power of a single chip of Journey 5 can reach up to 128TOPS, which is a high-computing chip for L4 high-level autonomous driving. In April of this year, BYD officially announced that it had reached a cooperation with Horizon Robotics to equip some of its models with Horizon Robotics' Journey 5 chip; soon after, SAIC also officially announced that it would work with Horizon Robotics to build an intelligent driving computing platform based on Journey 5 and Journey 6.

With the passage of the US chip bill and the continuous tightening of various upstream and downstream chip tools including EDA through export control policies, it has become a top priority for China to independently solve the chip supply problem. Horizon's Journey series is increasingly becoming an excellent representative of domestic alternative solutions. Looking at the domestic market, Changan, Chery, SAIC Zhiji, GAC Aion, Dongfeng Lantu, JAC, SAIC Maxus, Ideal, Great Wall, etc. have all become Horizon's solutions, which is the best example.

Comparison between new and old businesses of chip companies

Different from selling chips, Horizon Robotics is currently actively expanding its business of helping automakers develop their own chips. For automakers, if they can deploy exclusive chips, it will definitely enhance their differentiated competitiveness and speed up R&D and innovation. Horizon Robotics' model is the BPU licensing model.

As one of the earliest technology companies to enter the field of autonomous driving, Mobileye integrates chip architecture, chips, operating systems, and autonomous driving related software and hardware. After Mobileye completes all the development work, it will deliver it to car companies. In this model, for car companies, the software and hardware related to autonomous driving are completely a black box. At the same time, Mobileye's development cycle may be as long as 6 or 7 years. At a time when autonomous driving technology is developing rapidly, Mobileye's model of selling autonomous driving solutions in packages is gradually unable to better meet the research and development needs of car companies.

In sharp contrast to Mobileye is Nvidia. It developed the GPU architecture into chips and then packaged its own operating system CUDA. For car companies or autonomous driving technology companies, they can design autonomous driving software and hardware based on Nvidia's solution. In other words, under this model, the development of autonomous driving software and hardware is integrated with the vehicle development process. On the one hand, car companies have greater autonomy, and on the other hand, the relevant development cycle can be greatly shortened. For car companies and autonomous driving technology companies, this model is obviously more advanced and efficient than Mobileye's model, and this is also the main reason why Nvidia is more popular than Mobileye in the field of autonomous driving.

至于地平线，之前一直在推动所谓的Together OS 模式。在这种模式下，整车企业的开发工作不仅深入到自动驾驶这样的应用软件，还能够触达底层操作系统。这么做的做大好处在于推动量产的时间可以进一步缩短。而主机厂在前期介入的越深，就能够更好地调集各种资源，实现效率最大化。当前，地平线正在推动BPU授权模式。这种模式的最大特点就是打通芯片和整车之间的开发，让整车开发可以和芯片以及自动驾驶软硬件系统的开发实现高度协同。在这种情况下，车企可以为自己打造专属的自动驾驶芯片，实现整体芯片效率的最大化。之前特斯拉就是拥有自研芯片的能力，因此在算力上甚至能够超过英伟达，为AutoPilot和FSD提供最强的算力支持。而现在，地平线想做的就是将这种能力赋予更多车企。当然，芯片的专利依然牢牢掌握在地平线自己手中。

Chips are still a hot commodity in the eyes of investors

It has to be said that chip semiconductors are still the area most favored by domestic capital.

In addition to Horizon, in the first half of this year alone, CoreDrive Technology completed its B+ round of financing; CoreCore Technology received nearly 1 billion yuan in A round of financing; as for Black Sesame Intelligence, it has advanced to the C+ round of financing. Whether it is national policies or invested resources, China now gives priority to ensuring the various resources needed for chips from top to bottom. According to public data, in the past two years, the average annual financing scale of the domestic chip semiconductor field has exceeded 200 billion yuan, and in the first half of 2022, there was also a financing amount of more than 80 billion yuan. Companies like Horizon and Black Sesame Intelligence have been regarded as domestic alternative technology solutions to companies such as Nvidia and Mobileye that are deeply engaged in autonomous driving chips.

If we combine this with the new round of financing that Horizon is currently conducting and the provision of new services, Horizon is actively looking for new sources of income for itself. As a chip design company, if we take Nvidia as an example, its autonomous driving chips in the automotive field account for a relatively small proportion compared to the graphics card chips that Nvidia started with. For Horizon, in the absence of more business areas like Nvidia, tapping the potential based on the existing technology at hand is the only way to increase profits. Only with more beautiful financial reports and a stronger ability to resist shocks can Horizon's subsequent IPOs obtain higher valuations.