The domestic artificial intelligence chip company Cambrian Science and Technology Board has made new progress on the road to listing.

After being inquired by the Shanghai Stock Exchange on April 10, Zhongke Cambrian Technology Co., Ltd. (referred to as “Cambrian” for short) ) Disclosed the replies related to the first round of audit inquiry letters. Judging from the disclosed responses, the Shanghai Stock Exchange’s questions include 20 questions in 6 categories, involving the company’s equity structure, main business, core technology, R & D projects, operating income, investment projects, and accounts receivable.

On March 26, the Cambrian officially submitted its prospectus. Subsequently, issues such as the Cambrian shareholding structure, revenue dependence, market share, and low productization caused controversy. In this reply letter, Cambrian and his sponsors also answered.


In the next 3 years, R & D will also need to invest more than 3 billion yuan

From the prospectus previously announced, the end of the Cambrian reporting period, monetary funds, banks Wealth management products totaled about 4.3 billion yuan. The issuer intends to raise funds of 2.8 billion yuan for this issuance, 1.9 billion yuan for a new generation of cloud training chips, inference chips, edge artificial intelligence chips and system projects, and 900 million yuan for supplementary working capital.

For these fundraisings, the Shanghai Stock Exchange asked the Cambrian to explain the necessity of the fundraising and the budget planning for the existing funds. In response to this, the Cambrian stated in the reply letter that the fund-raising investment project involved three chip products: a new generation of cloud training chips and systems, a new generation of cloud inference chips and systems, and a new generation of edge-end artificial intelligence chips and systems. The capital is 1.8 billion yuan. In addition, in addition to the three chip products involved in the investment project, it is expected that there will be other 5-6 chip products that need to be invested in research and development in the next three years.

Referring to the R & D investment of the fundraising project, the R & D investment of a single smart chip and system is about 600 million yuan. It still needs RMB 3-6 billion to invest in these R & D projects. At the same time, in the next three years, the Cambrian will plan to invest RMB 340 million to strengthen the construction of IC components, chips, and hardware-related public components and modules, and invest RMB 340 million to strengthen the construction of a cross-chip basic system software public platform.

In addition to R & D investment, the increase in R & D personnel ’s salary and other expenses, as well as the major competitors ’stronger financial strength, are all funded by the Cambrian Necessary factors.
Why the IP licensing business fell sharply

At present, there are two main business models for the Cambrian artificial intelligence chip, one is to authorize the processor IP For chip manufacturers, for example, the cooperation with Huawei; the other is to design and sell chips themselves, such as the cloud smart chips launched by Cambrian for users such as Internet companies.

According to the Cambrian Prospectus, the issuer ’s terminal intelligent processor IP products mainly include 1A, 1H and 1M series. During the reporting period, the company ’s IP licensing business revenue accounted for 98.95%, 99.69%, and 15.49% of its main business revenue, respectively, and it showed a sharp downward trend in 2019. The revenue was mainly derived from Cambrian 1A and 1H products. For major customers.

For this reason, the Shanghai Stock Exchange asked the Cambrian to explain the reasons for the sharp decline in IP licensing business revenue in 2019 and whether the decline in IP licensing business revenue is sustainable.

The Cambrian responded that the income received from company A in 2018 included fixed fee income and royalty fee income. Since the IP has completed delivery, since 2019, it has been from company A The income obtained is mainly from royalty income, and fixed fee income has fallen significantly compared to 2018. Later, because Company A chose to independently develop intelligent processors, it did not continue to purchase Cambrian IP products.

Company A did not disclose in detail the theoretical peak performance and power consumption data of the smart processor in its self-developed 5G flagship mobile phone SoC chip. According to Cambrian approximation, its The overall theoretical peak performance (INT8) may be about 8-16 TOPS, which is in the same generation as the technical level of Cambrian 1M processor IP products.

At the same time, the Cambrian stated that it is difficult to expand a customer that is sufficient to replace Company A in purchasing scale in the short term. The Cambrian estimates that in 2020, the revenue of terminal smart processor IP licensing business will continue to decline in the short term, but will not decline for a long time in the future. In addition to various types of smart processor IP products, the patents applied by the Cambrian can also be carried out in the future Authorize to form authorized income.


How competitive is the Cambrian smart chip

From the prospectus, the Cambrian has already possessedComplete smart chip product line from terminal, edge to cloud. The Shanghai Stock Exchange believes that the Cambrian’s current disclosure of the company’s market position and market competition is too simple. In the past two years, many domestic and foreign integrated circuit leading enterprises and start-up companies have successively released many smart chip products. Companies in the same industry that are similar or comparable to the issuer in terms of business model and product category include Nvidia, Intel, AMD, ARM, Huawei Hisilicon, and others. Therefore, it is hoped that the Cambrian will disclose the market competition pattern, market share, and market status of the main products, and compare it with domestic and foreign products.

In response, the Cambrian replied that compared with overseas chip giants such as NVIDIA, the company ’s competitive advantage is mainly reflected in: the company ’s chip architecture is aimed at artificial intelligence applications Various algorithms have been optimized to effectively improve the performance, power consumption and performance price ratio of the product; the main R & D personnel of the overseas chip giant company is located overseas, and the response to the system software customization and optimization needs of domestic customers is slow, which may affect the performance of the chip products. Good performance. The company’s chip products can be optimized for the ecology and needs of domestic customers, and provide customers with fast response and flexible technical support services to give full play to the performance of chip products.

Compared with Huawei HiSilicon, the Cambrian competitive advantage is mainly reflected in: the company focuses on artificial intelligence chips, enters the field earlier, and has a first mover Advantage. The chip architecture is optimized for artificial intelligence applications and various algorithms, and a number of core technologies and key patents have been accumulated. The technological innovation capability has been widely recognized by the industry; the company is positioned as an independent and neutral chip company, which uses a neutral concept similar to Android. Ecological strategy, the underlying chip and system software fully serve customers and developers, but the company does not develop artificial intelligence application solutions (based on chips to further provide application software or algorithms) business, to avoid competition with its own chip customers, through neutrality Attract more customers.

Compared with the aforementioned companies, the company ’s main competitive disadvantages are: there is still a large gap in financial strength and R & D investment; there is still a certain gap between the software ecological improvement and Nvidia; cold The Wuji sales network has not yet been fully rolled out. Nvidia and Huawei HiSilicon have mature and complete sales networks, and their customers’ awareness of the product and market awareness are superior to the Cambrian.