Automotive chips have once again ushered in a new wave of enthusiasm.
The latest data from the China Association of Automobile Manufacturers: As of the end of June this year, the cumulative production and sales of domestic new energy vehicles have exceeded 30 million. As an important foundation for achieving automotive intelligence, networking, and electrification, chips have become one of the key factors for the future progress of the automotive industry.
At present, there are only 21 automotive chip stocks with a market value of over ten billion, among which GigaDevice's latest market value has reached 65.2 billion. GigaDevice, which can cover both automotive storage and MCU, is a representative domestic automotive chip manufacturer.
At the recent 2024 Munich Shanghai Electronics Exhibition, GigaDevice brought more than 80 innovative solutions from industrial, digital energy, automotive electronics, to the Internet of Things and consumer electronics fields. In the exchange with GigaDevice's memory division marketing director Xue Ting and MCU division product marketing director Chen Siwei, we want to explore a question: "What will the future development of automotive-grade storage and MCU be like?"
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GigaDevice, the hard-core debut of automotive-grade storage
"The opportunity of this wave of global new energy vehicles is in China. We seize this opportunity and cooperate with localization to break into a larger market." When talking about the view of automotive-grade storage, Xue Ting expressed optimism.
At present, GigaDevice has a complete range of automotive-grade GD25/55 SPI NOR Flash series chips, which have been applied to mainstream platforms such as Xinchi, Black Sesame, and Lianyang ITE in China and overseas, providing reliable code and data storage for intelligent cockpits, intelligent driving, central gateways, and body control systems.
The Xinchi X9 intelligent cockpit solution is equipped with GigaDevice's automotive-grade GD25LX512ME SPI NOR Flash, with a storage capacity of 512Mb, supporting frequencies of 200MHz&DTR, 166MHz&STR, and supporting QSPI, Octal SPI, and other modes. This intelligent cockpit solution is mainly aimed at common in-vehicle application scenarios such as 360° panoramic systems and voice wake-up, capable of achieving fast startup and fast wake-up functions.The Black Sesame A1000 intelligent driving solution is equipped with the GigaDevice GD25LF256F series automotive-grade SPI NOR Flash, which has a storage capacity of 256Mb and supports frequencies of 104MHz & DTR, 166MHz & STR, as well as modes such as QSPI and QPI. This intelligent driving solution supports integrated driving and parking, as well as advanced ADAS domain control.
As a leader in the storage industry, GigaDevice has already achieved a cumulative shipment of over 100 million automotive-grade storage chips last year. When talking about the latest application situation this year, Xue Ting said, "It has far exceeded 100 million, and the automotive-grade NOR Flash is still in a positive upward trend."
With the development of new energy vehicles, the application field of automotive-grade NOR Flash is continuously expanding. From the early car DVD, radio, virtual instrument panel, to later cameras, millimeter wave radar, ADAS, etc., NOR Flash is required.
Specifically, in the ADAS system, each camera requires one NOR Flash chip, with a storage capacity ranging from 4-128Mb. The driving record, navigation, image, and lane departure warning functions in the ADAS system generally require the use of 256/512Mb NOR Flash. High-end ADAS systems even require the configuration of 1Gb or higher capacity NOR Flash. Therefore, the demand for NOR Flash in cars is increasing.
There is a significant change this year: car manufacturers or Tier1 have started to emphasize localization. In the first five months of this year, three state-owned car companies (FAW, Dongfeng, Changan) used a total of 132 million domestic automotive chips. Many car companies have also put forward the requirements for chip localization, such as Dongfeng Motor, which has set a goal that the localization rate of chips will exceed 30% by 2025.
Under these conditions, GigaDevice has three major advantages in automotive-grade storage.
First, localization and localization. Apart from Tesla, most global new energy vehicle manufacturers are in China, and more and more new energy solutions are proposed by domestic companies, which will drive the entire localization industry chain. At the same time, many overseas Tier1 companies also need to enter the country, which requires localized solutions in China.
Second, the coverage of NOR Flash automotive products is very extensive. GigaDevice's automotive-grade NOR Flash products have a full range of capacities from 2Mb to 2Gb, support the harsh working temperature of 125 degrees of automotive specifications, and all pass the AEC-Q100 certification, which can meet the needs of the vast majority of customers. In the process of localization, GigaDevice is taking advantage of the trend.
Third, enough patience. The automotive industry chain is relatively conservative, and the cycle of each automotive product is very long. From the planning of a product to the actual mass production, at least one year is needed. This requires chip manufacturers to have enough patience to accompany Tier1 car manufacturers to grow together.It is precisely because of the three aforementioned advantages that GigaDevice's automotive-grade GD25/55 SPI NOR Flash and GD5F SPI NAND Flash have been widely used in applications such as smart cockpits, intelligent driving, intelligent networking, and the large, medium, and small three-electric systems of new energy electric vehicles. The shipment of over 100 million automotive-grade storage chips has also verified its capability to provide services to automotive customers and Tier 1 OEMs.
As for the future development direction of automotive-grade storage, technically, with the emergence of higher computing power demands such as ADAS and domain control, the capacity required for code storage is also increasing. GigaDevice also covers products with large capacities such as 128Mb, 256Mb, 512Mb, and 1Gb. At the same time, automotive companies are beginning to consider information security and functional safety, which also puts forward many new requirements for Flash in terms of specifications. GigaDevice will also further explore automotive-grade Flash with updated specifications.
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How does the leader view the ups and downs of the automotive-grade MCU market?
Based on the GD32MCU, GigaDevice also has a variety of automotive electronic solutions. These include a car dashboard equipped with GD32A503+GD25B512ME, which supports H.264 decoding, dual-layer cache, image scaling, and MIPI DSI/LVDS output.
The automotive DC brushless motor control system based on GD32A503, with all IPs independently defined, independently developed, and specifically optimized for domestic replacement.
The automotive LED turn signal light based on GD32A503, which can achieve more complex timing logic and brightness control, and complies with the national GB17509 standard for turn signal frequency requirements.
Under the continuous drive of the automotive semiconductor prosperity, GigaDevice is striving for the blueprint of automotive cores, and has launched its first automotive-grade MCU product in 2022. Speaking of automotive-grade MCUs, Chen Siwei said: "GigaDevice has long adhered to the automotive strategy and established an automotive product department. In the future, the company will concentrate its resources to enhance the capabilities of automotive MCUs in terms of products, solutions, and ecological collaboration."
The layout of GigaDevice's automotive-grade MCU is behind the consideration of incremental and stable factors.According to the market segmentation, automotive MCUs account for more than 35% of the general MCU market, making it the largest piece of the MCU pie. As Chen Siwei said: "Although our current market share is small, the potential for future growth is huge."
In addition, the product lines of automotive and industrial applications inherently have a strong resistance to market cycles, and there is no high demand for iteration speed from the consumer side. They will basically use a platform stably for 5 years or even longer. One of the reasons why GigaDevice is positioning towards the automotive direction is also because it has seen its strong ability to resist market risks.
When talking about the difficulties in competing with foreign competitors, Chen Siwei said: "The main issue is still the acceptance of customers." The requirements for MCUs in the automotive field are stringent, especially in areas with higher safety requirements such as power and chassis domains, and customers are very cautious about domestic automotive-grade MCUs.
From a technical perspective, designing an automotive-grade MCU requires overcoming many technical challenges and considering reliability and safety issues. Traditional automotive-grade MCU giants have a long history of product development and a solid customer base. Because of this close cooperation, they can get better feedback and customers will also help large manufacturers to revise and iterate products. There is still a significant gap in this regard for domestic manufacturers.
This year, many domestic companies have said that the automotive-grade MCU market is becoming more and more competitive. At the same time, looking at the performance of international giants, the growth of automotive-grade MCUs is also slowing down. Infineon reported that the automotive market has been declining since reaching its peak in the second quarter of 2023; NXP also pointed out in its financial report that the overall automotive market was weak in the first half of 2024; meanwhile, STMicroelectronics' automotive market sales in the first quarter have decreased by 23%.
In terms of various performances, the automotive-grade MCU market still faces great pressure. Regarding this issue, Chen Siwei frankly said: "To be honest, domestic automotive-grade MCU players are all new recruits." Currently, no domestic manufacturer occupies an absolute market share in the automotive-grade MCU, and in this situation, the fluctuations in the market have less impact on players with a small market share. For domestic MCU players, what is more important is how to win competitors in the competition of focused market segments or important customers, increase market share, do a good job in products, improve internal skills, polish technical IPs, build a good ecosystem, and provide good customer service, waiting for the arrival of market opportunities.
With domestic new energy vehicles occupying the mainstream market, GigaDevice can see that this is of some help to domestic suppliers. As long as domestic technology can meet customer requirements, domestic car manufacturers are willing to support MCU suppliers.
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The net profit for the first half of the year is expected to grow by more than 50%
In addition to the automotive field, GigaDevice also has many product and solution layouts in the industrial area, the Internet of Things, and the consumer field.In the field of digital energy, wireless energy monitoring and communication solutions based on the high-performance GD32F527 MCU and the GD32VW553 RISC-V Wi-Fi 6 MCU, AI direct current arc detection solutions based on the ultra-high-performance GD32H7 MCU, and 500W PFC+LLC digital power supply solutions based on the GD32E51x series were showcased.
In the industrial and edge computing fields, EtherCAT slave station application solutions based on the ultra-high-performance GD32H7 series MCU, Profinet industrial Ethernet solutions based on the ultra-high-performance GD32H7 series MCU, LVGL/emWin/ThreadX RTOS GUI graphic display solutions, and AI voice recognition solutions based on the ultra-high-performance GD32H7 series MCU were demonstrated.
In the IoT and consumer fields, smart keyboard solutions based on the low-power GD32L235 MCU, wireless dual-mode MCU Matter wireless connection solutions based on the RISC-V core GD32VW553, and vacuum cleaner motor control solutions based on the GD32E235 were presented.
It is worth mentioning that recently, GigaDevice Innovation released its semi-annual performance forecast for 2024, expecting a significant increase in performance in the first half of the year. The operating income is expected to be about 3.609 billion yuan, a year-on-year increase of 21.69%, and the net profit attributable to the shareholders of the listed company is about 518 million yuan, with a net profit year-on-year increase of about 54.18%.
Adapting to the times, transforming according to the situation, and innovating with the trend. We can see that GigaDevice Innovation maintains a market share-centered strategy, continuously optimizing product costs, and providing comprehensive product options and one-stop solutions for customers in the automotive, industrial, IoT, consumer electronics, mobile, and network communication industries.
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