Core Insights - The company, Unisoc, has outlined its strategic plans for the next 3-5 years, focusing on enhancing its leadership in the special integrated circuits and smart security chip sectors while ensuring quality and cost control [1] Group 1: Strategic Business Development - The company aims to solidify its market position in special integrated circuits and smart security chips, emphasizing the need for robust foundational work while maintaining high profit margins through effective cost management [1] - In the area of special integrated circuits, the company plans to integrate AI technology, forming R&D teams and pursuing external collaborations, investments, or acquisitions to advance its AI business strategy [1] - The company is particularly focused on edge AI applications to quickly establish a competitive advantage [1] Group 2: Smart Security Chips - For smart security chips, the company intends to maintain its market position in traditional smart card security chips while actively introducing new technologies and exploring new business models [1] - The company is prioritizing the development of automotive electronic chips, specifically aiming to create a series of automotive domain control chips to break the market monopoly of foreign high-end products [1] - The company currently holds a leading position in the domestic high-end power chassis controller sector and is expanding its range of automotive safety chips to support the transformation and upgrading of smart vehicles [1] Group 3: Broader Industry Focus - The company is also exploring opportunities in other fields, such as next-generation semiconductor devices and critical sensors [1]

Core Viewpoint - In 2024, Unisoc Microelectronics experienced a significant decline in revenue and net profit, primarily due to a sharp drop in its special integrated circuit (IC) business, despite maintaining high gross margins in this sector [1][5][9]. Group 1: Financial Performance - In 2024, the company achieved revenue of 5.511 billion yuan, a year-on-year decrease of 27.26%, and a net profit attributable to shareholders of 1.179 billion yuan, down 53.43% [1]. - The special IC business saw a revenue drop of 46.76%, significantly impacting overall performance [1][5]. - The smart security chip business, while facing a slight revenue decline of 7.61% in 2024, maintained strong profitability with a gross margin of 44.16% [5][9]. Group 2: Business Segments - The product structure includes smart security chips, special integrated circuits, and quartz crystal frequency devices, with smart security chips historically contributing over 40% of revenue, now reduced to 30%-40% [3]. - The special integrated circuit business, which includes over 700 product varieties, had its revenue share drop to 46.76% in 2024 after peaking at around 60% in previous years [3][5]. - The quartz crystal frequency device business has remained stable, generating revenue between 200-300 million yuan, accounting for less than 10% of total revenue [4]. Group 3: Market Dynamics and Future Outlook - The semiconductor industry faced an 8.2% decline in sales in 2023, impacting Unisoc Microelectronics' special IC sales and revenue [5]. - Despite the challenges, the company is focusing on emerging areas such as edge AI and automotive electronics for growth in 2025, while maintaining its position in traditional smart card security chips [8][9]. - As of Q1 2025, the company reported a revenue of 1.026 billion yuan, a decrease of 10.05%, but the decline in net profit was primarily due to reduced investment income from the transfer of equity [8].