Summary of VeriSilicon Conference Call Company Overview - **Company**: VeriSilicon (688521.SS) - **Industry**: Semiconductor and Chip Design Key Points and Arguments 1. **Revenue Guidance**: VeriSilicon expects 2Q25 revenues to grow by 50% QoQ to Rmb584 million, which is a decrease of 5% YoY and 26% below previous estimates [1][3] 2. **Order Growth**: The company reported a 23% QoQ increase in orders, reaching Rmb3 billion by the end of 2Q25, with 90% of these orders related to chipset turnkey solutions [2] 3. **Growth Drivers**: Management identifies AI edge devices (such as AI smartphones, AI PCs, and AI glasses) as key growth drivers for the upcoming periods [1][2] 4. **Gross Margin Improvement**: Expected gross margin for 2Q25 is projected to improve to 44.5%, up from 39.1% in 1Q25, attributed to a better product mix favoring IP licenses, which have a gross margin of over 80% [1] 5. **Chip Design Services**: Slower growth is anticipated in the chip design services segment, contrasting with the stronger performance in chipset production management and IP licenses, which are expected to grow by 12% and 17% YoY, respectively [1] 6. **Earnings Revision**: Earnings estimates for 2025-2027 have been revised down by 21% for 2025, 1% for 2026, and 1% for 2027 due to lower-than-expected revenues from chipset design [3] 7. **Long-term Opportunities**: Management remains optimistic about long-term opportunities in autonomous driving SoCs and Chiplet technology, indicating the ability to provide customized solutions for various clients [2] Additional Important Information 1. **Operating Expenses**: The operating expense ratio is revised up by 0.3 percentage points in 2025E to reflect increased R&D spending for chipset and ASIC development [3] 2. **Target Price**: The 12-month target price is set at Rmb128, reflecting a 21.3% upside from the current price of Rmb105.55, based on a discounted P/E methodology [9][18] 3. **Risks**: Key risks include slower-than-expected technology development, higher talent acquisition costs, and weaker customer spending on IP and new chipset projects [17] This summary encapsulates the essential insights from the conference call, highlighting the company's performance, growth prospects, and potential risks in the semiconductor industry.