American politicians are demanding restrictions on RISC-V, an open source technology. According to the latest foreign media reports, a number of US politicians have urged the Biden government to take policy action on the RISC-V open source instruction set architecture to restrict the use of Chinese companies on the grounds of "national security."

RISC-V is an open source instruction set architecture based on reduced instruction sets, which was created by researchers at the University of California, Berkeley in 2010. Open source RISC-V breaks the conventions of x86 architecture, ARM architecture with high licensing fees and customization difficulties. By the end of 2022, RISCVInternational had more than 3180 members in 70 countries, more than 10 billion RISC-V cores on the market, and tens of thousands of engineers worldwide working on RISC-V programs.

If the proposal of American politicians to restrict RISC-V is implemented, it will have a great impact on non-autonomous instruction set processors, which will be beneficial to fully autonomous CPU manufacturers. Due to the changes in the international situation, x86 architecture and ARM architecture chips have the risk of authorized supply, and RISC-V architecture is developing rapidly because of open source, especially domestic manufacturers regard RISC-V as an alternative. If the US proposal to restrict RISC-V is implemented, the processor architecture from the United States may be limited whether it is open source or not, and the advantages of domestic fully autonomous instruction set architecture will be more prominent, such as Godson's LA instruction set.

Longxin Zhongke is a CPU manufacturer with LA independent instruction set system and independent IP. Different from many domestic CPU enterprises which are mainly based on ARM or x86 instruction system and integrated into the existing foreign information technology system, Godson Zhongke has launched hundreds of IP cores such as autonomous instruction system LA and autonomous CPU IP core, GPUIP core, memory controller and PHY, high-speed bus controller and PHY.

With the accelerated launch of new products, the performance of 3A 6000 has been improved by 60%, and the performance-to-price ratio has been greatly improved. The company said on the investor interactive platform on October 9 that the new 3A6000 product is expected to be released in the fourth quarter of this year and is currently in the process of sending the whole machine to the test. In addition, GPGPU expects to deliver streaming in 2024. Compared with 3A5000, the new 3A6000 improves single-thread performance by more than 60% under the same process, and the whole-chip multithreading performance is doubled, but the silicon wafer area is reduced, so the performance-to-price ratio is doubled.

It is optimistic that Godson will take the route of fully autonomous instruction set architecture. It is optimistic that the company should start with solutions to improve performance-to-price ratio, improve software ecology, and reconstruct the industrial chain, so as to achieve three changes: first, from technological "supplementary lessons" to ecological construction; second, from policy market to open market; third, from following overseas CPU companies to independent development, to become a CPU enterprise supporting the domestic science and technology industry.

Investment suggestion: from 2023 to 2025, the revenue of the company is estimated to be 1.082 million yuan, 17.34 billion yuan, respectively, and the net profit of returning mother is 0.78 million yuan, respectively. Maintain a "buy" rating.

Investment risk: the localization process is not as expected, and the customer introduction is not as expected.