Core Viewpoint - The report highlights the financial performance and operational developments of Loongson Technology Corporation Limited for the first half of 2025, indicating a mixed performance with revenue growth but increased losses due to rising costs and strategic shifts in product focus [4][5][6]. Financial Performance - The company's revenue for the first half of 2025 was approximately 243.51 million yuan, representing a 10.90% increase compared to the same period last year [4]. - The total profit for the period was a loss of approximately 297.57 million yuan, compared to a loss of 277.07 million yuan in the previous year [4]. - The net profit attributable to shareholders was a loss of approximately 294.47 million yuan, compared to a loss of 238.13 million yuan in the same period last year [4]. - The company's net assets decreased by 9.61% to approximately 2.65 billion yuan compared to the end of the previous year [4]. Business Operations - The company operates primarily in the integrated circuit design industry, utilizing a Fabless model where it designs chips and outsources manufacturing and testing [8]. - The company has seen a 61.09% increase in revenue from industrial control chips, driven by a recovery in the safety application market [5]. - The revenue from information technology chips grew by 5.01%, benefiting from the high cost-performance ratio of the 3A6000 chip and the recovery of the domestic electronic government market [5]. - Revenue from solution services decreased by 25.93% as the company continues to adjust its product structure [5]. Product Development - The company has launched new products, including the 2K3000/3B6000M SoC chips aimed at industrial control and terminal applications, and the 2P0300 SoC chip for printers [9][10]. - The company is focusing on building an ecosystem around its LoongArch architecture, with efforts to enhance its software ecosystem and support partners in developing SoC products based on its CPU core IP [9][18]. - The company is actively expanding its market presence in industrial control and open markets, leveraging the cost advantages of its low-cost chips [18]. Industry Context - The integrated circuit design industry is characterized by high technical barriers and significant R&D investment, with China being a major player in the global market [8]. - The industry is experiencing rapid growth due to advancements in consumer electronics, automotive electronics, and artificial intelligence applications, despite facing challenges from international trade restrictions [8]. - The establishment of an independent ecosystem outside the X86 and ARM architectures is gaining traction, with the development of alternatives like LoongArch and RISC-V [8].

Core Viewpoint - The 2025 Loongson product launch and user conference showcased advancements in domestic chip development, emphasizing the importance of self-developed instruction sets and the establishment of a robust integrated circuit industry ecosystem in Haidian District [1][3]. Group 1: Product Launch and Features - The conference introduced the Loongson 3C6000 series server processors, which utilize the self-developed LoongArch instruction set, featuring 16 cores and 32 threads, achieving performance levels comparable to mainstream products in 2023 [1]. - The Loongson 3B6000M and 2K3000 chips, aimed at terminal and industrial control applications, are set to tape out successfully by the end of 2024, completing a product line that includes desktop, server, and terminal CPUs [2]. - The Loongson company has adopted a steady technological approach, focusing on enhancing single-core performance before increasing core counts, with the latest 4-core Loongson 3A6000 desktop CPU reaching market-leading single-core performance levels [2]. Group 2: Industry Development and Support - Haidian District is actively building a modern industrial system to promote strategic emerging industries, including integrated circuits, with over 240 companies in the sector, including 10 listed companies and 4 unicorns [3]. - The district has implemented a chip tape-out subsidy policy, offering up to 15 million yuan in support to reduce R&D costs and accelerate technological iterations for companies [3]. - In 2024, the integrated circuit industry in Haidian is projected to achieve revenue contributions of 43 billion yuan, reflecting a year-on-year growth of 13%, with significant revenue growth of approximately 20% in the first five months of 2025 [4].