Core Viewpoint - The launch of the OpenRio high-performance open-source RISC-V processor IP by the RISC-V International Open Source Laboratory (RIOS) marks a significant milestone in the development of domestic semiconductor IP in China, addressing the low localization rate of semiconductor IP and providing a foundation for the domestic operating system ecosystem [1][4]. Group 1: Market Context - China is one of the largest chip consumption markets globally, but the localization rate of semiconductor IP remains low [1]. - The global semiconductor design IP market is projected to reach $8.4916 billion in 2024, a 20.2% increase from $7.0625 billion in 2023, with strong growth in wired interface IP and processor IP, which grew by 23.5% and 22.4% respectively [2]. - The global IP market is highly concentrated, with the top four suppliers (ARM, Synopsys, Cadence, Alphawave) holding approximately 75% of the market share [2]. Group 2: Competitive Landscape - The current global chip IP market is dominated by a few giants, but the landscape is changing due to trends like AI and Chiplet technology [2][3]. - ARM, while leading in mobile device CPU IP, faces challenges from a slowing smartphone market and competition in the AI and high-performance computing sectors from Synopsys and Cadence [2][3]. - RISC-V, as an open-source instruction set architecture, is emerging as a third mainstream architecture alongside x86 and ARM, appealing to global innovators and posing potential challenges to existing giants [3]. Group 3: RIOS and OpenRio - The OpenRio IP core is designed to fill the gaps in ARM's product line and supports domestic operating systems, offering a "zero licensing cost, high-efficiency starting point" for small and medium-sized manufacturers and developers [4]. - RIOS laboratory aims to accelerate the integration of domestic operating systems and chips, providing a common technological foundation for the deep integration of international open-source RISC-V instruction sets and domestic operating systems [5][6]. - OpenRio is a high-reliability IP core that has undergone multiple rounds of verification and is compatible with mainstream EDA tools, making it suitable for key areas such as smart homes, industrial control, and automotive electronics [6]. Group 4: Future Prospects - RIOS plans to build an open-source REPO platform to create a CPU IP open-source foundation, aiming to provide continuous and reliable technological supply for the industry [6]. - The Shenzhen Qianhai area will be the first to pilot the application of OpenRio, with RIOS collaborating with more partners to create a win-win situation through IP licensing, technical cooperation, and scenario co-construction [6].

Investment Rating - The report gives a "Buy" rating for the company, marking the first coverage of the stock [4][5]. Core Views - The company is positioned as a leading provider of one-stop customized chip design and semiconductor IP licensing services, focusing on R&D to drive future growth [14][17]. - The demand for self-developed ASICs from cloud vendors is surging, presenting historical opportunities for the chip design service industry [2][38]. - There is a pressing need for domestic semiconductor IP, with the company ranked first in China and eighth globally in terms of sales revenue [3][4]. Summary by Sections One-Stop Customized Chip Design & IP - The company offers comprehensive chip customization services and semiconductor IP licensing, with a strong emphasis on R&D and talent development [14][17]. - As of Q1 2025, the company has a record high order backlog of 24.56 billion yuan, indicating robust future revenue potential [1][11]. ASIC Demand Surge - The chip design service industry is experiencing a significant demand increase for self-developed ASICs, particularly from major cloud service providers [2][38]. - The company has strong supply chain capabilities, enabling it to meet the self-development needs of large enterprises [2][38]. Semiconductor IP Localization - The company is the leading provider of semiconductor IP in China, with a wide range of applications for its NPU and GPU IP products [3][4]. - The localization of semiconductor IP is critical, and the company is well-positioned to benefit from the trend towards domestic alternatives [3][4]. Profit Forecast and Investment Recommendations - Revenue projections for the company are 31.8 billion yuan in 2025, 40.6 billion yuan in 2026, and 58.8 billion yuan in 2027, with expected growth rates of 36.9%, 27.6%, and 45.0% respectively [4][9]. - The company is expected to turn profitable by 2025, with a projected net profit of 0.1 billion yuan, growing significantly in subsequent years [4][9].