Summary of VeriSilicon Conference Call Company Overview - **Company**: VeriSilicon (688521.SS) - **Industry**: Semiconductor, specifically focusing on AI ASIC solutions and semiconductor IP products Key Points Order Momentum and Growth - Strong order momentum is evident, with orders on hand reaching **Rmb3 billion**, reflecting a **33% YoY** and **23% QoQ** increase, driven by AI ASIC design services and production management orders [4] - Over **80%** of these orders are expected to convert to revenue within one year, supporting sequential growth [4] - The company has **100+ design projects** on hand, indicating growing demand from AI computing projects [4] AI ASIC Projects - Management is optimistic about the growth of AI/ASIC solutions, particularly for cloud and edge devices, including AI/AR glasses, AI smartphones, AI Pads, and AI toys [4] - The trend towards localization of AI chips is expected to benefit the company [4] - Private placement funding is being utilized to accelerate new product development in ASIC IP and GPU IP [4] Semiconductor IP Coverage - VeriSilicon has a comprehensive semiconductor IP coverage, including GPU IP, NPU IP, VPU IP, DSP IP, Display IP, and over **1,600** analog/mixed signal IP and RF IP [4] - In-house IP products are designed to optimize chip size, bandwidth, and performance, saving clients time and costs [4] Financial Projections - The 12-month price target for VeriSilicon is set at **Rmb193**, representing a **26.1% upside** from the current price of **Rmb153** [7] - Revenue projections for the next few years are as follows: - **2024**: Rmb2,321.9 million - **2025E**: Rmb3,025.6 million - **2026E**: Rmb4,951.9 million - **2027E**: Rmb6,526.3 million [7] Risks - Potential risks include: 1. Slower-than-expected technology development [6] 2. Higher-than-expected costs for talent acquisition and retention [6] 3. Weaker-than-expected customer spending on IP and new chipset projects [6] Conclusion - Overall, management remains positive about the rising demand for AI solutions and the company's ability to capitalize on this trend through its AI ASIC turnkey solutions and extensive semiconductor IP offerings [4]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company has achieved a historical high in backlog orders exceeding 3 billion yuan, driven by significant growth in intellectual property licensing fees and volume business revenue [1] - The company is positioned as a leading player in customized ASIC and IP solutions, with a strong customer base including major tech firms [2][4] - The company is expected to experience substantial revenue growth in the coming years, with projected revenues of 31.8 billion yuan in 2025, 40.6 billion yuan in 2026, and 58.8 billion yuan in 2027, reflecting year-on-year growth rates of 36.9%, 27.6%, and 45.0% respectively [11] Summary by Sections Financial Performance - In Q2 2025, the company reported revenue of 584 million yuan, a quarter-on-quarter increase of 49.90%, primarily driven by a 99.63% increase in intellectual property licensing fees [1] - The company signed new orders worth 1.182 billion yuan in Q2 2025, marking a nearly 150% quarter-on-quarter increase [1] - The company’s backlog reached 3.025 billion yuan by the end of Q2 2025, a 23.17% increase from Q1 2025 [1] Business Segments - The company’s chip design business signed over 700 million yuan in new orders in Q2 2025, with a year-on-year increase of over 350% [2] - The volume business generated revenue of 261 million yuan in Q2 2025, reflecting a quarter-on-quarter growth of 79.01% and a year-on-year growth of 11.65% [3] - The company has a diverse application portfolio, including data centers, automotive, wearable devices, and IoT, which positions it to benefit from the growing demand in these sectors [4] Market Position - The company has established a strong presence in the semiconductor industry, with significant experience in various process nodes from 5nm to 250nm [2] - The company’s intellectual property (IP) revenue from GPU, NPU, and VPU IP accounted for approximately 75% of its total IP revenue in the first half of 2025 [9][10] - The company is actively collaborating with leading clients in AI and automotive sectors, enhancing its market competitiveness [4][10]

Summary of the Conference Call for XinYuan Technology Company Overview - XinYuan Technology, established in 2001, is one of the first chip design companies in Zhangjiang and was successfully listed on the Sci-Tech Innovation Board in 2020 [3][2]. Key Financial Performance - Since its IPO in 2020, XinYuan has shown consistent revenue growth, with a 25% increase in revenue in 2022 despite a downturn in the semiconductor industry [2][3]. - In Q4 2024, new orders exceeded 1 billion yuan, representing an over 80% year-on-year growth [2][3]. - The company reported a revenue of 3.90 billion yuan in Q1 2025, a 22% increase year-on-year, with both chip design and mass production businesses growing over 40% [4][14]. Research and Development - XinYuan invests approximately 30% of its revenue in R&D, with 90% of its employees being R&D personnel, and 89% holding master's degrees or higher [2][30]. - The company has a strong focus on AI-related technologies, with AI-related license revenue accounting for 40% of total license income in 2024 [2][8]. IP Business Performance - XinYuan's IP business ranks eighth globally and first in China, with a diverse range of IP types comparable to ARM [2][5]. - The company has licensed its IP to 445 clients, with VPU IP holding the largest market share globally [5][8]. - In 2024, license revenue reached 633 million yuan, with 216 licensing agreements, an increase of 82 agreements year-on-year [8][2]. Custom Chip Design Business - The custom chip design business generated 725 million yuan in 2024, a 47% increase year-on-year, with AI-related NRE revenue making up 68% of this segment [11][2]. - 85% of design revenue comes from projects using 14nm or more advanced process technologies [11][2]. Mass Production Business - In 2024, mass production revenue was 856 million yuan, with 98 chip types shipped [12][2]. - Revenue from the data processing sector grew over 75%, while the computer and automotive sectors saw increases of over 60% and 30%, respectively [12][4]. Market and Application Areas - XinYuan's products are widely used in various sectors, including data processing, AI, and automotive applications [12][5]. - The company has established a strong presence in North America and Europe, with over 90 million chips shipped globally [9][2]. Future Growth Drivers - The primary growth driver is related to generative AI, with expectations for significant advancements in edge AI applications [16][20]. - The company is also focusing on chiplet technology, which is expected to see widespread adoption by 2026 [25][46]. Competitive Landscape - XinYuan faces competition from both domestic and international firms, but its strong IP portfolio and focus on custom solutions provide a competitive edge [37][51]. - The company is actively working to enhance its capabilities in high-speed interfaces and other critical IP areas through strategic acquisitions [45][2]. Conclusion - XinYuan Technology is well-positioned for future growth, leveraging its strong R&D capabilities, diverse IP offerings, and strategic focus on AI and custom chip solutions to navigate the evolving semiconductor landscape [39][40].