core original microelectronics (Shanghai) co., ltd. (securities code: 688521 securities abbreviation: core original shares) released the record form of investor relations activities on January 5. when the company received a survey of specific objects from January 3 to 4, it was revealed that in terms of advanced semiconductor process nodes, the company already has successful flow chip experience of 14nm/10nm/7nmFinFET and 28nm/22 nmFD-SOI process node chips, At present, 5nm system-on-a-chip (SoC) has been successfully streamed, and multiple 5nm one-stop service projects are being implemented.

in addition, according to IPnest's statistics in 2022, from the perspective of semiconductor IP sales revenue, core was originally the first semiconductor IP authorized service provider in mainland China and the seventh in the world. among the top seven enterprises in the world, core was originally the top two in IP types.

core original shares is a company that relies on its own semiconductor IP to provide customers with platform-based, all-round, one-stop chip customization services and semiconductor IP licensing services. The main business applications include consumer electronics, automotive electronics, computers and peripherals, industry, data processing, Internet of Things, etc. The main customers include IDM, chip design companies, system manufacturers, and large Internet companies.

In the first half of 2023, the company realized operating income of 1.184 billion yuan and net profit attributable to owners of the parent company of 22.2176 million yuan, an increase of 7.3952 million yuan or 49.89 percent over the same period last year. The net profit attributable to owners of the parent company after deducting non-recurring gains and losses was 2.0926 million yuan, an increase of 15.5229 million yuan over the same period last year. In the first three quarters of 2023, the company achieved operating income of 1.765 billion billion yuan, a year-on-year decrease of 6.34. In the first three quarters, the net profit attributable to the owner of the parent company was -134.2187 million yuan, and the net profit attributable to the owner of the parent company after deducting non-recurring gains and losses was -156.0524 million yuan.

The following are the specific questions and answers:

Question: What is the future planning of Xinyuan in Chiplet field?

reply :Chiplet is one of the important development trends in the semiconductor industry. core has been committed to the promotion of Chiplet technology and industry in recent years, realizing the industrialization of Chiplet through "IP chip, IPasaChiplet" and "chip platform, ChipletasaPlatform. As the first semiconductor IP supplier in the mainland and the top seven in the world, Xinyuan has rich processor IP cores and leading chip design capabilities. in addition, we have established long-term cooperative relations with global mainstream packaging and testing manufacturers and chip manufacturers, and are the first enterprises in mainland China to join the UCIe alliance, which is very suitable for launching Chiplet business. In the future, we plan to continue to promote the research and development of related technologies, and continue to promote the industrialization of Chiplet through customer cooperation projects and industrial investment. Chiplet will take the lead in AIGC training, fine-tuning, and reasoning applications and smart travel applications. Core is expected to be the first company in the world to launch Chiplet commercial products for customers.

Question: Can you ask the company to introduce what technical reserves it has in the field of autonomous driving?

reply: in the field of intelligent vehicles, the company has been working for many years, with a layout from intelligent cockpit to automatic driving technology. for example, the ISPIP of xinyuan has obtained the ISO26262 certification of automobile functional safety standards, which can provide high-quality, safe and reliable visual processing for automobile systems. other IP of the company is also in the process of gradually carrying out vehicle regulation certification. At present, the company's chip design process has been certified by the ISO26262 Automotive Functional Safety Management System, and can provide customers with chip design services that meet various automotive safety integrity levels in accordance with international standards. At present, in the field of automatic driving, a series of semiconductor IP such as core original GPU, AI, ISP, etc. have been adopted by many well-known car companies and automatic driving chip providers in the world. At present, the customer project of automatic driving SoC chip based on 5nm process is in progress.

Question: How do you view the increase in the gross interest rate of the mass production business?

reply: with the continuous improvement of the company's chip design capability, mass production business service capability and software support service capability, the gross profit margin of the company's mass production business was 26.77 in the first three quarters of 2023. In recent years, our customer types have gradually changed to system manufacturers, Internet companies and cloud service providers with higher participation and added value. In the first three quarters of 2023, the company's revenue from customer groups such as system manufacturers, large Internet companies and cloud service providers was 0.86 billion billion yuan, an increase of 11.21 percent over the same period last year, accounting for 48.76 percent of operating income and an increase of 7.70 percentage points over the same period last year. The gradual increase in the revenue of these customer groups can bring better bargaining power to the company and help increase the gross profit margin of the company's mass production business.

in addition, under the company's one-stop chip customization service business model, the company faces less pressure on market risks and inventory risks, and only needs to manage the growing mass production business with a relatively stable mass production business team, which has the advantage of scalability. therefore, the gross profit generated by the mass production business can contribute mostly to the net profit.

Question: What is the technical layout of the company in the artificial intelligence field?

reply: in the field of artificial intelligence, the company currently has various product combinations such as NPU, high-performance GPU, GPGPU, AIGPU subsystem with independent intellectual property rights. for GPU, GPGPU, NPU, the company also has a compiler instruction set designed completely independently. based on the above technical accumulation, we can not only meet the computing requirements of generative AI training in the cloud and reasoning at the edge, it can also widely enable intelligent upgrades of various devices from the cloud to the end. Among them, the original GPU can be integrated with the company's independent intellectual property NPU, supporting graphics rendering, general computing and AI processing, providing a large computing power general processor platform for data centers, cloud games and edge servers, and using a unified software interface and an integrated compiler, allowing users to use standard programming interfaces to drive different hardware processor units. Core's original proprietary GPGPU can support large-scale general-purpose computing and ChatGPT-like applications, and is now used by customers to deploy high-performance AI chips to scalable Chiplet architectures for data centers, high-performance computing, automotive and other applications.

Question: What is the company's current layout in RISC-V areas?

Reply: With the development of the Internet of Things era, the demand for scenarios is fragmented and differentiated, which brings great demand for customized, modifiable, low-power, and low-cost RISC-VCPU. The company has a number of RISC-V core-based customer projects in progress; in addition, the company has combined its own technology reserves to launch a RISC-V open hardware platform based on single-core, dual-core and quad-core RV64CPU clusters to support the development and promotion of open source software. This platform integrates the neural network processor NPU, graphics processor GPU and image signal processor ISP, which have been successful in the market, and provides relevant Linux software SDK, which can help enterprises speed up the design and verification of chip software and hardware and quickly launch products to the market.

The development of the RISC-V industry requires the development of ecology in addition to the development of technology itself. As a leading supplier of chip design services and semiconductor IP, Core has been actively deployed in RISC-V areas. In September 2018, Xinyuan was recommended by the Shanghai Municipal Commission of economy and information technology as the first chairman unit,

In cooperation with the Shanghai Integrated Circuit Industry Association, the China RISC-V Industry Alliance has been established with key domestic enterprises, scientific research institutes, and investment institutions in the RISC-V field. The alliance has developed more than 100 members so far; in addition, the company has also carried out equity in RISC-V fields Investment and other layouts.