Great Wall Motor has invested in the establishment of a semiconductor company and is in discussions with multiple automotive companies for order cooperation. | Exclusive from 36Kr.

On December 26, witnessed by Great Wall Motor, its funded Nanjing Bauhinia Semiconductor Co., Ltd. signed a landing agreement with Nanjing Jiangbei New Area.

Bauhinia Semiconductor is a company focused on RISC-V automotive-grade chip design and development cultivated by Great Wall Motor. The establishment of this chip originated from a chip crisis that Chinese automotive enterprises once encountered, and Great Wall Motor was also affected by this crisis.

In 2021, Great Wall Motor encountered a serious chip shortage problem, and chips in areas such as MCUs faced insufficient supply. Affected by this, Great Wall Motor experienced varying degrees of production reduction in 2021 - 2022.

In October 2022, Great Wall Motor, troubled by the chip problem, decided to independently research and develop chips to achieve independent research and development of several products such as MCUs, drivers, power supplies, and communication. Thus, the Bauhinia chip team was incubated.

After 9 months, the team and the partners jointly completed the product definition, design, verification, manufacturing, and application testing of Bauhinia M100. In September 2024, the Bauhinia M100 chip successfully operated on the vehicle headlight controller.

In December 2024, Nanjing Bauhinia Semiconductor Co., Ltd. was officially established.

This semiconductor company was jointly funded by Tianjin Great Wall Investment Co., Ltd. under Great Wall Motor, Cao Changfeng, the former chief engineer of Great Wall Motor's EE architecture, Nanjing Sujixin Enterprise Management Partnership (Limited Partnership), and Jiefekei Semiconductor (Shanghai) Co., Ltd. Cao Changfeng serves as the chairman of Bauhinia Semiconductor.

Cao Changfeng recently received an exclusive interview with 36Kr.

He introduced to 36Kr that Bauhinia Semiconductor has planned three types of products: MCUs, AFEs, and SoC chips for the central area controller. Currently, the Bauhinia M100 chip has been put into use, and the subsequent other products will also be launched for research and development one after another.

Regarding the first product of Bauhinia Semiconductor, the Bauhinia M100, Cao Changfeng said, "There are already three automotive enterprises that mainly require the use of our products." The high performance and low cost brought by the RISC-V open source architecture, as well as Bauhinia Semiconductor's forward-looking vision in safety standards and future functional applications, have earned the Bauhinia M100 market recognition.

As an MCU vehicle control chip, the overall research and development investment of the Bauhinia M100 is more than 80 million. Currently, this chip is in the volume-up stage, and the sales target of Bauhinia Semiconductor is to achieve a vehicle installation volume of 2.5 million in 5 years.

Nowadays, the localization of the supply chain has become an industry consensus in the new energy vehicle industry. Domestic manufacturers in fields such as chips, suspensions, and steering are all moving towards domestic substitution.

Cao Changfeng told 36Kr that to make purely domestic substitute products, basically only the price war is left, and such competition is not benign. The strategic positioning of Bauhinia Semiconductor is not to take the substitute route, but to hope to make innovations in technical differences.

With the expansion of Bauhinia Semiconductor's chip business, not only Great Wall Motor, but the entire automotive industry will usher in the era of localization of vehicle control chips.

The following is the conversation between Cao Changfeng, the chairman of Bauhinia Semiconductor, and 36Kr, slightly adapted without changing the original meaning:

36Kr: Currently, smart driving and cockpit chips are the hotspots in the industry. Which segmented market does Bauhinia Semiconductor focus on? How large is this segmented market capacity?

Cao Changfeng: Currently, there are more than a dozen domestic manufacturers making smart driving and cockpit chips, and this number even exceeds the number of OEMs. At present, it seems that the penetration rate of smart driving and smart cockpit should be able to reach more than 70% in 2027. However, because there are too many manufacturers positioned in this area, and the iteration rate and investment are relatively large, Bauhinia Semiconductor has not exerted efforts in this area.

We have planned three types of products in total. The first is the MCU-type chip, the second is the AFE-type chip matched with the MCU, and the third is the SoC chip for the central area controller. The entire market volume is relatively large.

Taking the MCU chip as an example, for Great Wall Motor, including functions such as headlight control and tailgate control, the number used in each Great Wall vehicle is as high as 17, so the overall quantity is relatively large.

36Kr: Now automotive enterprises are pursuing cost reduction, and the direction of the supply chain is also towards intelligence and popularization. Has Bauhinia Semiconductor made targeted considerations at the product design end?

Cao Changfeng: This is a topic we cannot avoid.

When making the M100, we considered this issue from three aspects. The first is cost reduction at the technical level. Our MCU chip has a built-in HSM module, and this HSM module supports the national encryption standard of SM234, so an HSM chip can be saved, and the cost can be reduced.

The second technical cost reduction action is the design of the entire chip. We adopt the open source design of RISC-V, which itself has the advantages of high performance and low cost. Compared with similar products, our cost is 20 - 30% lower.

The third point is that we have introduced some new technical features. For example, our next-generation controller is required to be able to support the 21434 network security standard. Many European and Japanese manufacturers' products do not support this standard, but our products already do. This is our very advanced technical planning, and the product competitiveness is relatively sufficient.

Another thing that can be mentioned is an ESD design. There are two major indicators of the ESD design. One is the HBM charging and discharging model, which we can reach 8000V, while foreign products can only reach 4000V. The second is the charging and discharging device model CDM, and our CDM design reaches 2000V, while foreign similar products are only 750V.

These two designs can meet the use of vehicles in scenarios with high electrostatic requirements such as off-roading and dry winter.

36Kr: Foreign manufacturers are also positioning RISC-V architecture chip products. How is the competitiveness of Bauhinia Semiconductor reflected?

Cao Changfeng: In terms of RISC-V, both domestic and international manufacturers have invested more in industrial and consumer products. Last year, China's shipment volume was approximately 5 billion, mainly consumer products. For automotive-grade ones, as far as I know, including Dongfeng and Bauhinia Semiconductor, there are only 3 or 4 companies. Foreign ones like NXP and Qualcomm are positioned in this area. Within this range, we are relatively leading.

36Kr: How is the situation of chip shortage in domestic automotive factories?

Cao Changfeng: In 2021, the entire industry encountered a chip crisis. Since then, everyone has begun to plan how to alleviate the shortage of automotive chips. However, in the second half of 2023, the chip shortage situation has basically not existed. Foreign chips have basically become a situation of small profits but quick turnover.

In such a situation, we have also reflected on the pain. Because of the chip shortage, there is indeed no this problem today, but in the long run, will we still face such a problem? Although there is no chip shortage now, the localization of chips is to cope with the uncertainty of the international situation, ensure the safety of the industrial chain, and promote China to become a strong automotive country.

36Kr: It took two to three years from the initiation to the landing of the M100 chip. For this chip alone, what is the overall investment approximately?

Cao Changfeng: We did it in conjunction with the Beijing Open Source Chip Research Institute and other partners. We roughly estimated that the total investment of all three parties combined is basically nearly 100 million yuan. The cost of chip research and development is very high.

36Kr: The sales target of the M100 chip is to be installed in 2.5 million vehicles in the next five years. Why was such a number set?

Cao Changfeng: This is a plan we made based on the current planned usage of the company and the actual achievable situation. Our chip is currently gradually increasing in volume, and we expect to achieve a 70% replacement rate in the future. Considering various factors such as comprehensive research and development, production capacity, and market capacity, our comprehensive estimated volume is approximately at the level of 2.5 million in 5 years.

36Kr: But Bauhinia Semiconductor is positioned to radiate the entire industry and sell chips to automotive enterprises other than Great Wall. What are your advantages?

Cao Changfeng: When designing Bauhinia Semiconductor, we made a design at the architecture level to facilitate the adoption by other automotive factories.

In terms of the actual communication situation, the enthusiasm of the entire industry for our chips is very high because our chips are fully domestic, including the CPU core, which is independently made in our country, which is of great benefit to the entire country.

The preparatory work we have done currently includes a popular awareness for the OEMs, that is, the architectures of RISC-V and ARM that everyone is very concerned about. What is the difference? We have also made a detailed analysis and communicated with various OEMs. From the overall design perspective, the main difference is at the chip level, and its architecture is different, but we have already shielded this.

In addition, we have also made an open source IDE design. This IDE product is currently stable and can provide a free open source version, and there is no problem in using it. In terms of debugging and commissioning, it is basically consistent with ARM.

So we gave an example that may not be particularly appropriate. Like the difference between using Office and WPS, only a simple adaptation is needed, and there is no essential difference. So this is also a reason that is very accepted by various markets.

36Kr: Then what is the progress of M200, M300, and S300 currently? How is the capital demand for the subsequent projects?

Cao Changfeng: M200 is currently in the rehearsal process, and it is expected that the research and development will be initiated in the first half of 2025. M300 is also expected to start in the second half of the year. Regarding the SoC chip S300, we are defining this product with Great Wall Motor, and there is no clearer timeline yet.

In terms of capital demand, the investors have a relatively large support for us, and a large amount of funds will continue to come in in 2025, which can basically meet our development needs. In addition, through the sales of M100, we can also achieve break-even. Regarding the funds, there is no need to worry.

36Kr: There is a small consensus in the automotive industry that domestic substitution has gradually become a cost-effective substitute role. Does Bauhinia Semiconductor recognize this positioning?

Cao Changfeng: The products of MCUs, AFEs, and SOCs that we make are actually with many innovations in technology, and they are not a pure substitute product. There are not only future functional feature plans but also the ability to meet some specific needs. Our future SoC products are also newly created and completely different from the existing products on the market.

Making a pure substitute is not promising because manufacturers do not lack such products, and suppliers can only compete on price, and such competition is not benign. We hope to make innovations in technical differences, not take the substitute path, but take the route of technological innovation, which is our strategic positioning.