Shortly after the beginning of 2020, the “investment company” Xiaomi began to take action again.
Buffett said: “I am fearful when others are greedy, and I am greedy when others are fearful.” At the moment when the global economy is on the brink of crisis, Lei Jun’s Xiaomi Industry Fund has turned on greed mode.
Since January 16, Xiaomi Group, through its Hubei Xiaomi Changjiang Industrial Fund Partnership (Limited Partnership), referred to as Xiaomi Changjiang Industrial Fund, has invested in Diao Microelectronics and Smart Microelectronics in just over two months. and eight semiconductor companies including Aojie Technology.
In this wave of operations, it has been less than half a year since Xiaomi’s first investment in Shutong Semiconductor on November 19, 2019. So far, Xiaomi’s supply chain investment map has expanded to 19 semiconductors, covering Wi-Fi chips, radio frequency (RF) chips, MCU sensors, and FPGAs.
Xiaomi’s core-making dream has not stopped.
In October last year, Smart Things conducted an investigation and report on Xiaomi’s supply chain investment, and sorted out Xiaomi’s ecological chain and supply chain investment strategy, especially in the semiconductor field. (“Xiaomi Breakthrough War: Investing in the layout and fighting of 12 supply chain companies in two years, how many trump cards does Lei Jun have?”)
Xiaomi revealed in its second quarter 2019 financial report that as of June 30, 2019, it had invested in more than 270 companies with a total book value of 28.7 billion yuan, a year-on-year increase of 20.8%. Meanwhile, as of Aug. 20, it had invested in 12 supply chain companies ranging from semiconductors to smart manufacturing.
Among them, the 8 semiconductor companies it has invested in not only provide power for its own “AI+AIoT” dual-engine strategy in the short term, but also for it to impact the chip research and development market for a long time and open up the “meridians” of the industrial chain. Technical foreshadowing.
And these are the industrial chain “self-rescue” and new tactics that Xiaomi has carried out in the semiconductor field after the miscarriage of the Surging S2 chip.
With Xiaomi’s series of investment moves since 2020, Zhishi decided to focus on Xiaomi’s semiconductor investment plan again. While exploring Xiaomi’s layout and progress in the semiconductor field, it also found out its hidden strategic ideas and changes. .
At the same time, can Xiaomi’s industrial chain investment tactics really create a new technological layout? The long road is long. What ambitions and expectations of Lei Jun are reflected in Xiaomi’s core-making road?
1. In 2020, “eight shots” will be fired to accelerate investment in the semiconductor supply chain
In February this year, at Xiaomi’s first product launch of the new year, the flagship Mi 10, which had been in space for a while, once again caused the industry’s popularity. The protagonist that supported the product’s performance was also upgraded from Qualcomm Snapdragon 855 to Snapdragon 865. .
The back of the Snapdragon 865 “Halo” blessing is the third year of the “dim” of the Xiaomi Pengpai S2.
The term “self-developed chip” has gradually become another weakness of Xiaomi since the launch of the Xiaomi 5C mobile phone and the Surging S1 in 2017, and this is also a story that has long been told by the industry as “rotten”.
In 2018, since the reorganization of Songuo Electronics, a semiconductor company under Xiaomi, and the establishment of Nanjing Dayu Semiconductor, Xiaomi’s self-developed core road seems to have stopped to the outside world.
Although a year later, Big Fish Semiconductor and Pingtou jointly released the NB-IoT SoC chip named U1, which is oriented to the Internet of Things field, with built-in GPS and PA (power amplifier chip), and supports Beidou NB-IoT R13, but it is not in the There are too many waves in the market. Looking back, I do not know since when, the official website of Songuo Electronics has long been covered with gray, indicating that it cannot be accessed.
However, contrary to the slow progress of Xiaomi’s self-developed chips, Xiaomi’s semiconductor investment is gradually accelerating.
On January 23, 2018, Shunwei Capital, jointly established by Zimi Technology, a subsidiary of Xiaomi, and Lei Jun, made a Series A investment in Nanxin Semiconductor, a semiconductor company engaged in integrated circuit (IC) research and design, with a transaction amount of several thousand 10,000 yuan, the first shot of Xiaomi’s entry into the semiconductor investment battlefield.
In the next two years, Xiaomi’s investment “engine” continued to accelerate, and successively invested in 19 semiconductor companies including Yunyinggu Technology, Espressif Technology, and VeriSilicon, covering Display driver chips, MCU sensors, Wi-Fi chips and RF chips. and many other fields. Among them, Juchen Semiconductor, Espressif Technology and Jingchen Semiconductor have successfully listed on the Science and Technology Innovation Board.
And Xiaomi’s momentum has continued into 2020, and it has shown a stronger momentum in the market.
Since January 16, Xiaomi’s Hubei Xiaomi Changjiang Industrial Fund Partnership (Limited Partnership), referred to as Changjiang Xiaomi Industrial Fund, has invested in a total of 8 semiconductor companies within two months, adding 7 new investments, far more than past frequency.
According to public information statistics, these 8 semiconductor companies are Diao Microelectronics, Sutong Semiconductor, Xinbaite Microelectronics, Fortior (Fengdai Technology), Onray Microelectronics, Aojie Technology, Smart Microelectronics and Hanxin Microelectronics electronic.
1. Diao Microelectronics
Diaowei, established in February 2010, is a hybrid analog semiconductor IC design and manufacturing company. Its founder and chairman Ju Jianhong graduated from the State University of New York with a major in electrical engineering. Fairchild Semiconductor has nearly ten years of work experience, responsible for chip design, technology, application and market work.
At present, Diao Microelectronics provides corresponding chip solutions for consumer electronics, smart home, LED lighting, medical electronics and industrial electronics. The main products include LED lighting components, ultra-low power consumption and low noise amplifiers, and high-efficiency power supplies. Manage electronic components, as well as electronic components used in various analog audio/video applications.
As of July 1, 2019, Diao Micro has applied for 65 patents of various types. Among them, 15 invention patents have been authorized and 17 utility model patents have been authorized.
According to the public information of the Management Committee of Jiangsu Nantong Sutong Science and Technology Industrial Park, on June 30, 2019, Diao Micro has been listed on the Science and Technology Innovation Board.
On January 16, 2020, Diao Micro also ushered in a strategic financing from Xiaomi. Its shareholder added Changjiang Xiaomi Fund, holding 17.23% of the shares, but the transaction amount has not been disclosed.
2. Smart Microelectronics
Smart Microelectronics is a provider of MCU chips and solutions. It was established in March 2011. Its chairman and CEO, Dr. Wu Zhongjie, graduated from Southeast University and has work experience in many large chip design companies.
In terms of products, Smart Microelectronics has developed MM32 series MCU products based on Arm Cortex-M0 and Cortex-M3 cores, mainly F/L/W/SPIN/P five series, which are aimed at general high-performance market, ultra-low power consumption And security applications, wireless connections, motors and power supplies, and OTP (One Time Programable) MCUs.
It is understood that MM32 series MCU products have been widely used in automotive electronics, industrial and motor control, smart home appliances and medical, consumer electronics and other markets.
In fact, as early as August 31, 2015, Smart Microelectronics was listed on the New Third Board, but the company issued an announcement in 2019 that it would terminate its stock listing on March 14 and announce its delisting.
Following the expansion of Xiaomi’s semiconductor industry chain investment, Xiaomi also focuses its investment on the MCU technology advantages of Smart Microelectronics. On January 19 this year, Smart Microelectronics obtained strategic financing funds invested by the Changjiang Xiaomi Industry Fund, and the registered capital increased to 56.68 million yuan, an increase of 19.88%.
At the same time, Wang Xiaobo, managing partner of Xiaomi Industry Fund, became the new director of Smart Microelectronics.
3. Core Baxter Microelectronics
Compared with other semiconductor companies invested by Xiaomi, Corebaxter, which was established in October 2018, is particularly young.
It is understood that after graduating from Tsinghua University with a master’s degree in microelectronics, the company’s founder and CEO Zhang Haitao went to the United States to study and obtained a doctorate in microelectronics from the University of California. He has more than ten years of work experience in Qualcomm, TriQuint and RFaxis. At the same time, he also led the R&D team in charge of Apple iPhone5/6 and Texas Instruments WiFi RF terminal projects.
Corebaxter mainly uses high-performance RF chip technology to design and develop wireless communication RF devices. Its products are deployed in the fields of 5G, Wi-Fi and IoT, targeting communication equipment, consumer electronics, automotive electronics, medical electronics and smart devices. a market.
At present, the company has developed products such as Wi-Fi 5 front-end modules (FEM), 5G communication power amplifiers and RF switches, and has reached partnerships with companies such as Xiaomi, Lenovo, China Mobile and China Telecom.
On January 21 this year, Corebaxter also disclosed its first equity financing. The Changjiang Xiaomi Industry Fund invested 560,300 yuan, accounting for 4.33% of the shares, becoming the company’s seventh largest shareholder.
4. Fortior
Founded in May 2010, Fengdao Technology is a relatively low-key IC design company that mainly develops special-purpose chips for motor drive control.
According to the survey, founder and CEO Bi Lei was selected into the eighth batch of “Thousand Talents Program” of the National Organization Department of the Central Committee in 2012, and CTO Bi Chao was also selected into the eleventh batch of “Thousand Talents Program” in 2015. It is an important talent policy implemented by our country for the introduction of returning talents.
At the same time, Bi Chao served as a postdoctoral tutor at the National University of Singapore, a senior member of IEEE, and was a senior scientist at the Singapore Science and Technology Agency, with rich R&D experience in the field of motor technology.
At present, Fengdao Technology has set up two R&D centers in China and Singapore.
Through a number of core technologies such as three-phase and single-phase Hallless DC brushless drives, it has developed a full range of brushless DC motor drive products, including three-phase BLDC dedicated control chips, single-phase BLDC dedicated control chips, and motor-specific MCU series It is widely used in terminal equipment, drones, consumer electronics, home appliances and medical equipment and other fields.
In April 2014, Fengdao Technology obtained a Series A financing with a transaction amount of tens of millions of RMB. The strategic financing announced on January 21 this year was invested by Xiaomi Changjiang Industrial Fund, ZTE Venture Capital and other institutions, of which Xiaomi invested 1.2972 million yuan, accounting for 1.87% of the equity.
5. Onray Microelectronics
For Ongrid, who has just moved to a new home, Xiaomi’s investment of RMB 3.1071 million on February 20 is undoubtedly good news. Before that, Ongrid had not increased its capital for seven years. It is understood that after the investment, Xiaomi’s equity accounted for 6.98%, becoming the third largest shareholder of Onray Micro.
At the same time, this investment will also be used in the research and development of RF front-end chips for 5G mobile phone terminals and a new generation of IoT SoC chips.
Founded in July 2012, OnRay Micro is one of the important RF/analog integrated circuit design and development manufacturers in China.
It has developed 2G/3G/4G/5G RF front-end chips, Bluetooth low energy (BLE) chips, and dual-mode Bluetooth chips for mobile terminals and the Internet of Things through its long-term accumulation of RF technologies such as CMOS, SiGe, GaAs, and GaN. , a series of RF front-end and wireless connection chips such as low noise amplifiers, and more than 200 chips have been mass-produced.
It is understood that the chips developed by Onray Microelectronics have covered consumer fields such as mobile terminals, wearable devices, drones and smart homes. Customers include manufacturers such as Samsung Electronics, Foxconn, ZTE, TCL and Lenovo.
6. Speedway Semiconductor
Compared with other traditional chip manufacturers, Shutong Semiconductor, which was established in July 2018, is also relatively young. It is a Wi-Fi 6 chip design company, but it is the only non-new investment company in Xiaomi’s semiconductor investment in 2020.
In fact, Changjiang Xiaomi Industry Fund has invested in Sutong Semiconductor on November 19, 2019, becoming the company’s sixth largest shareholder, and this is Xiaomi’s last investment in the semiconductor field in 2019.
Based on Sutong Semiconductor’s chip research and development technology in the field of Wi-Fi 6, Xiaomi decided to increase its weight, and led the company’s A round of financing on February 20 this year, with Yaotu Capital following. So far, the registered capital of Sutong Semiconductor has increased from the initial 10.4 million yuan to 13 million yuan, an increase of 25%.
In addition to further expanding the engineering R&D team, Sutong Semiconductor also plans to use the investment in the R&D and mass production of Wi-Fi 6 SoC products.
It is reported that the company’s core R&D team has rich experience in Wi-Fi 6 standardization, and has previously developed more than 20 wireless SoC chipsets for Wi-Fi, Bluetooth and cellular 4G worldwide.
At this stage, the company is also accelerating the research and development and mass production of next-generation Wi-Fi 6 chipsets to further meet the strong market demand for Wi-Fi 6 chips.
7. Aojie Technology
Aojie Technology is a baseband chip design company that mainly develops mobile terminal equipment, Internet of Things, navigation and other consumer electronic chips. In the round of financing, Alibaba is the largest shareholder, holding 21.75% of the shares.
Aojie Technology, which has a rich financing history, obtained strategic investment from Changjiang Xiaomi Industry Fund, Industrial Securities Investment and other institutions on February 24 this year. The registered capital also increased from 363 million US dollars to 375 million US dollars. Among them, Xiaomi’s subscribed capital contribution was US$5.1917 million, accounting for 1.38%.
It is understood that Dai Baojia, founder and chairman of Aojie Technology, graduated with a master’s degree in electrical engineering from the Georgia Institute of Technology, and also has a master’s degree in business administration from the University of Chicago. Before founding Aojie Technology, he also served as the chairman and CEO of RDA, a radio frequency chip company.
It is worth mentioning that the company acquired Marvell’s Mobile Communications Unit (MBU) in 2017, becoming one of the few companies in my country with full Netcom technology.
At present, Aojie’s product line has covered multi-standard communication standards including 2G/3G/4G/5G and IoT, and has successfully developed mobile communication baseband chips, Wi-Fi chips, LoRa chips and multi-mode IoT wearables Chips and other communication chips.
8. Hanxin Microelectronics
Founded in March 2017, Hanxin Microelectronics is a fast charging protocol chip company, including digital-analog hybrid chips, power chips, etc. At present, the company has a number of business product lines such as LDO (low dropout regulator), voltage detection, lithium battery charging, fast charging interface identification and USB charging protocol port, covering a wide range of toys, smart meters and fast charging.
It is understood that Hanxin Microelectronics not only reached tens of millions of strategic investment cooperation with TCL and SK Hynix in 2017, but also is a fast charging protocol supplier for Qualcomm, Huawei and Spreadtrum and other companies. The cumulative shipment of fast charging protocol chips The amount is nearly 100 million.
Just a week ago, on March 10, the Changjiang Xiaomi Industry Fund announced that it would increase its foreign investment and formally invested in Hanxin Microelectronics.
At the same time, the registered capital of Hanxin Microelectronics also increased from RMB 2.7778 million to RMB 3.1121 million, an increase of 12.04%.
2. An important weapon for Xiaomi to impact semiconductors: Changjiang Xiaomi Industry Fund
It is not difficult to see that Xiaomi’s semiconductor industry layout is the same as Lei Jun’s usual “first-hand ecological chain, first-hand industrial chain” investment path, and also puts “eggs” in two baskets, one is self-developed chips, and the other is industrial chain investment. .
However, from the actual situation, Xiaomi’s self-developed core road is not smooth.
It is understood that the Pengpai S1 launched by Xiaomi in 2017 is a 64-bit processor, using a 28nm process technology and an eight-core design, and includes four 2.2GHz A53 cores, four 1.4GHz A53 cores, and 4-core Mali-T860 GPU.
For Xiaomi, which started from the Internet, the birth of Surging S1 is not easy, but Lei Jun made the first shot of Xiaomi Semiconductor’s research and development in the mobile smart terminal market. Compared with other competitors, this chip is in performance, Processes and power consumption are still weak.
With rumors that the Surging 2 chip could not break through the power consumption performance bottleneck, and the executive team could not afford the huge expenses in chip R&D and tape-out, Xiaomi’s original huge self-developed core plan gradually disappeared.
Although with the reorganization of Songuo Electronics Co., Ltd., Big Fish Semiconductor jointly launched the NB-IoT SoC chip with Pingtou Ge in 2019, but its performance was mediocre and failed to really refresh the industry and market’s “insufficient core-making ability” label of Xiaomi .
So, should Lei Jun wake up from his stumbling dream of self-developed cores? For now, the answer remains no.
Xiaomi, who is proficient in the field of industrial chain investment, has gradually opened up a semiconductor supply chain investment path with “Xiaomi characteristics” in the past two years or so, which has made up for the shortcomings of its own semiconductor research and development strength from the side.
According to Smart Things, among the 19 semiconductor companies that Xiaomi has invested in in the past two years, in addition to Shunwei Capital, which was founded by Lei Jun’s partnership, it also includes Hubei Xiaomi Changjiang Industrial Fund Partnership (referred to as Changjiang Xiaomi Industrial Fund). , Jiangsu Zimi Electronic Technology Co., Ltd. (Zimi Technology for short), Tianjin Venus Venture Capital Co., Ltd., Wuhan Luojiawutong Emerging Industry Investment Fund Partnership and People Better.
Behind the semiconductor investment map that Xiaomi is slowly spreading, the Changjiang Xiaomi Industry Fund has played the most important role.
It is understood that the fund was established in 2017 with a target size of 12 billion yuan, which is mainly used to support the business expansion of Xiaomi and Xiaomi ecological chain enterprises. However, unlike other funds that focus on investing in IoT companies, this fund’s foreign investment is mainly focused on the semiconductor field.
Zhishi found that at present, Changjiang Xiaomi Fund has made 24 foreign investments publicly on the enterprise industrial and commercial information inquiry platform, covering fields such as mobile phones and smart hardware, core components of electronic products, smart manufacturing, industrial automation, new materials and new processes.
Among them, more than half of the fund’s investment fell in the semiconductor field, a total of 13, which has become an important weapon for Xiaomi to invest in the semiconductor supply chain.
At present, it seems that the “angel investor” Lei Jun’s semiconductor investment dream is accumulating full force to move forward.
3. From “making cores” to “investing in cores”, Xiaomi’s semiconductor ambitions for AIoT
2020 is not only the second year after Lei Jun announced the launch of Xiaomi’s “mobile phone + AIoT” dual-engine strategy, but also the third year of Xiaomi’s core-making dream.
At this stage, Xiaomi’s semiconductor investment layout has been laid out in many fields such as MCU, FPGA, RF, GaN and IP, and has gradually realized the coverage of the entire industry chain from semiconductor materials, electronic components to IC design.
But it is not difficult to find that Xiaomi’s core-making dream is turning the rudder, from the mobile terminal chip market initially targeted by Lei Jun, to the Internet of Things market.
The most direct manifestation is that Xiaomi’s smartphone product hardware is still dominated by Qualcomm chips, while its semiconductor investment focuses on the wider application range of AIoT.
For example, Xiaomi has invested in more than 8 semiconductor companies in the smart home field, including Wuxi Haoda, Amlogic, VeriSilicon, Ankai Microelectronics and Onray Microelectronics.
This is undoubtedly an important step for Xiaomi to take the lead in the development of AIoT in the market in 2018.
According to the data reported by the market research agency iiMedia Research, in 2018, the scale of my country’s AIoT hardware market has reached 500 billion yuan, and this figure is expected to exceed one trillion yuan by 2020.
At the beginning of 2019, Lei Jun announced that he would invest 10 billion yuan in the AIoT field in the next five years, and Xiaomi’s R&D investment has also increased year by year.
On February 13 this year, Xiaomi issued a voluntary announcement to disclose the latest revenue and research and development expenses. For the year ended December 31, 2019, Xiaomi’s research and development expenses are expected to be about 7 billion yuan, and it plans to increase key investment in the 5G+AIoT field to further expand the company’s advantages in IoT.
At the same time, for the year ending December 31, 2020, Xiaomi’s R&D expenses are expected to exceed 10 billion yuan, 4 years ahead of Lei Jun’s commitment in 2019 to reach 10 billion in R&D investment within 5 years. In contrast, in 2017, Xiaomi invested only 3.151 billion research and development expenses, accounting for 2.75% of total revenue.
From another point of view, Xiaomi is more inclined to take the “win-win investment” core-making road. Simply put, Xiaomi is one of the “gold masters” of those semiconductor companies, and is also an important customer of them.
Take Jingchen Semiconductor, which Xiaomi invested in in November 2018, as an example. The company mainly develops multimedia smart terminal application processor chips, and companies including Amazon, Google, Alibaba, Baidu and Xiaomi are its customers. Among them, in 2018, the sales amount of Jingchen Semiconductor to Xiaomi was about 262 million yuan, accounting for 11.06% of the revenue in the same period.
It is based on this strategic relationship that Xiaomi’s AIoT business also achieved good results in fiscal year 2019.
According to Xiaomi’s 2019 Q3 financial report data, as of September 30, 2019, the number of IoT devices (excluding smartphones and laptops) connected to the Xiaomi IoT platform reached 213.2 million units, a year-on-year increase of 62.0%.
In addition, Xiaomi’s IoT and consumer products revenue was 15.6 billion yuan, a year-on-year increase of 44.4%. Among them, according to the statistics of Aowei Cloud, Xiaomi TV ranked first in domestic shipments with a market share of 16.9% in the third quarter of 2019.
From this point of view, Xiaomi is showing its ambitions under the wave of AIoT and core making with its accelerating semiconductor investment layout.
But Xiaomi’s core road, ambition is not enough. Behind the semiconductor investment landscape, Xiaomi is still suffering from the sting of “lack of core” and “lack of technology”. At present, Xiaomi wants to truly stand on the commanding heights of the industry and become a “great company” as Lei Jun said, but it still lacks a “core”.
Conclusion: The success and failure of Xiaomi’s core road
Looking back at the public opinion field of Xiaomi’s chip manufacturing, on the one hand, the industry ridiculed and questioned Xiaomi’s self-developed chips, and on the other hand, it was the curiosity and expectation of the capital market for Xiaomi’s strategic investment.
At this stage, in terms of Xiaomi’s investment and specific development in the semiconductor industry chain, its core-making breakthrough is still a long and protracted battle. On the one hand, Xiaomi is still waiting for the “comeback” of Songuo Electronics, and hopes that the “rookie” Big Fish Semiconductor will catch up. .
It is undeniable that although Xiaomi’s investment in semiconductor companies will help enrich and expand its own AIoT business, in the final analysis, how much does these investments support Xiaomi’s own chip R&D technology? Can it really bring technological innovation to Xiaomi? We don’t know yet.
Xiaomi’s accelerating semiconductor investment layout can provide development impetus for its “AI+AIoT” dual-engine strategy in the short term, and enrich and expand its AIoT business. But in the long run, Xiaomi Lei Jun’s dream of making cores is still a long way off.
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