(photo source: titanium media App editing shooting)

Eight months after being included in the "entity list" of the US Department of Commerce, Cambrian, the "first share of AI chips," said it was under pressure from product supply.

at the performance presentation meeting on the afternoon of August 31, Chen Tianshi, chairman and general manager of Cambrian company, responded to titanium media App, saying: after the company was included in the "entity list" by the us department of commerce, its products have been affected to some extent due to supply chain factors. The company to overcome external difficulties, Cambrian and subsidiary research and development and various business work is in an orderly manner.

"The current development of the company and the industry is obviously affected by some non-commercial and non-technical factors. Against this well-known background, we sincerely appeal to the media to give more tolerance and support to the company and other enterprises in the same industry." Chen Tianshi said.

This is the first time in eight months that Cambrian Chairman Chen Tianshi has responded to the impact of the US Department of Commerce's Bureau of Industry and Security (BIS) on the Cambrian export control "entity list" in December 2022.

Chen Tianshi, Chairman and General Manager of Cambrian Company

it is reported that zhongke cambrian technology co., ltd. (Cambricon) was established in 2016. it is the first start-up company in China to launch cloud intelligent chips. it focuses on the research and development and design of artificial intelligence (AI) chip products and provides a series of intelligent chip products and platform-based basic system software with cloud-side-end integration, software and hardware collaboration, training and reasoning integration, and unified ecology.

Cambrian originated from the scientific research transformation of the Institute of Computing Technology of the Chinese Academy of Sciences. Its products include cloud training chip Siyuan 290, reasoning chip Siyuan 270, Siyuan 370, edge computing Siyuan 220 chip and other complete AI computing power product lines. It is applied to scenarios in the fields of Internet, finance, transportation, energy, power and manufacturing, providing better computing hardware and computing power basic support for various AI applications, its customers include China Mobile,

On July 20, 2020, Cambrian (688256.SH) was successfully listed on the CRE Board, with a 288 percent increase in first-day trading and a market capitalization of more than 100 billion. However, as its multiple financial reports showed that the company had suffered losses for six and a half consecutive years (2017-2023), high R & D investment, and inability to make profits, it encountered market doubts, and the market value fell to about 40 billion yuan in May 2022.

And U.S. export control restrictions have put more pressure on the supply and performance of Cambrian products.

In December 2022, 36 entities, including Cambrian, were included in the export control "entity list" by the U.S. Department of Commerce's Bureau of Industry and Security (BIS) on the grounds of national security and diplomatic interests ". This means that all technology or services exported to the Cambrian are subject to licensing.

Subsequently, Cambrian said in its 2022 annual report that the impact of the matter on the company's research and development is still limited, and the company's core technology comes from Cambrian's independent research and development and has independent intellectual property rights. it will not have a significant adverse impact on the company's product research and development and core competitiveness. The company will actively evaluate and respond to the impact of the "entity list" on the company's R & D work, production links, market expansion, etc., and control this impact within a controllable range.

however, according to the prospectus submitted by Cambrian in 2020, its wafer foundry part is mainly purchased from TSMC, chip IP and EDA tools are mainly purchased from US Cadence, US Synopsys and UK ARM, and packaging and testing services are mainly purchased from moonlight, US Amkor and Changdian technology, with relatively concentrated procurement. It is estimated that nearly 70% of the procurement expenditure comes from enterprises in the United States and Taiwan.

Therefore, in fact, the "entity list" of the US government did have a certain impact on the long-term supply chain of the Cambrian. Cambrian said frankly in its 2022 annual report, "In the long run, switching to new suppliers will incur certain costs, which may adversely affect the company's operating performance."

Cambrian's interim results released on August 30 showed that in the first half of 2023, Cambrian's operating income was 0.114 billion yuan, down 33.37 percent from the same period last year. The net loss attributable to shareholders of listed companies was 0.545 billion yuan, compared with 0.622 billion yuan in the same period last year. Net profit loss after deducting non-recurring gains and losses was 0.641 billion yuan. Gross profit margin was 70.86, up 15.93 percentage points from the same period last year. The total expenditure was 0.483 billion yuan, accounting for 421.56.

according to the calculation of titanium media App, as of the first half of 2023, the total net loss of cambrian company in the past six and a half years is as high as about 4.4 billion yuan.

Year to date, two transformations have occurred in the Cambrian:

first, the rapid explosion of ChatGPT and large models and the increased demand for AI chip computing power have attracted much attention in Cambrian, with share prices up 191.06 per cent in the past eight months. Chen Tianshi said that based on the advantages of cloud products, the company optimized the performance of its products in AIGC and large language model fields for the recently emerging large model fields, and promoted technology and product cooperation with customers in many industries. Second, TSMC suspended supply, which had a certain impact on the first 7nm chip developed by Cambrian intelligent driving chip subsidiary Cambrian Xingge, thus being exposed to large-scale layoffs, the software department laid off nearly half of the staff, and the hardware department retained only a few employees and other adjustments. Although Chen Tianshi did not respond positively to the layoffs at the performance meeting, he said that the R & D and various operations of the company and its subsidiaries are progressing in an orderly manner, mainly due to the company's business planning based on factors such as industry, market, and supply chain. Perform information disclosure obligations in accordance with the requirements of relevant laws and regulations.

The financial report shows that as of June 2023, the total number of Cambrian employees was about 1265, including 980 R & D personnel. The total number of R & D personnel in the same period last year was 1207, a year-on-year decrease of 227, including subsidiaries. The number of employees decreased by less than 300.

In fact, it's not just the Cambrian, but a number of chip companies have recently implemented layoffs and equity changes due to the industry downturn.

according to the exclusive data obtained by titanium media App from enterprise search, as of June 30, in the first half of 2023, 10299 chip-related enterprises in China were canceled or revoked, higher than the total of 5746 in 2022 and 3420 in 2021.

(Note: The data caliber only counts the company name, business scope, and product name of the company that contains the keywords "chip" and "semiconductor")

At the same time, there has been a significant decline in chip investment and financing. According to exclusive data obtained by titanium media App from enterprise investigation, in the first half of 2023, China's chip circuit completed a total of 542 financing events, a decrease of 13.4 compared with the same period in 2022, and the total amount of financing was also lower than that of the same period last year.

Chen Tianshi revealed that the sixth-generation intelligent processor microarchitecture and instruction set are under development. The new product will focus on optimizing scenarios such as training reasoning of large models and recommendation systems to enhance product competitiveness in terms of programming flexibility, energy efficiency, power consumption, area, etc. However, Cambrian also admitted that in the intelligent computing cluster system market, industrial chain ecological structure and other aspects, compared with Nvidia's market advantage position, Cambrian has a certain competitive disadvantage and gap.

(this article starts with titanium media App, author | Lin Zhijia, editor | Ma Jinnan)